If the Fed Raises the Interest Rates on Short-Term U

question 178

Multiple Choice

If the Fed raises the interest rates on short-term U.S. government bonds, then the Security Market Line shifts

• A) downward as the risk-free interest rate increases.
• B) downward as the risk-free interest rate decreases.
• C) upward as the risk-free interest rate increases.
• D) upward as the risk-free interest rate decreases.

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Definitions:

Agricultural Act

Legislation concerning the agricultural sector, typically involving policies on farming, subsidies, crop insurance, and food safety, among other areas.

Marketing Loan Program

A federal farm subsidy under which certain farmers can receive a loan (on a per-unit-of-output basis) to plant a crop and then, depending on the harvest price of the crop, either pay back the loan with interest or keep the loan proceeds while forfeiting their harvested crop to the lender.

Food, Conservation, and Energy Act

A comprehensive U.S. law enacted periodically that covers a wide range of agricultural and food programs, including farm subsidies, nutrition assistance, and land conservation efforts.

Crop Price

The amount of money that farmers receive for the agricultural products they produce, which can vary based on supply and demand.