If There Are Just Two Assets, Bonds and Money, Then

question 41

Multiple Choice

If there are just two assets, bonds and money, then an excess demand for money implies

• A)an excess supply of bonds.
• B)nothing about conditions of demand for the other financial asset.
• C)equilibrium in the bond market.
• D)an excess demand for bonds.
• E)an indeterminate equilibrium in the bond market.

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Definitions:

Ending Retained Earnings

The amount of net income left over for the business after it has paid out dividends to its shareholders, captured at the close of an accounting period.

Revenues

The total income generated by a business from its normal business operations, including sales of goods and services, before any expenses are deducted.

Expenses

Outflows or using up of assets as a part of operations of a business to generate revenue.

Equity

The ownership interest held by shareholders in a corporation, represented by the residual assets minus liabilities.