Which of the Following Is Correct

question 39

Multiple Choice

Which of the following is correct?

• A)Lenders sell bonds and borrowers buy them.
• B)Long-term bonds usually pay a lower interest rate than do short-term bonds because long-term bonds are riskier.
• C)The term junk bonds refers to bonds that have been resold many times.
• D)None of the above is correct.

Examine the impact of international trade and trade restrictions on net exports, the real exchange rate, and the demand for dollars in the foreign-currency exchange market.

Distinguish between various factors that shift the demand and supply curves in the markets for loanable funds and foreign-currency exchange.

Understand the equilibrium condition in the open-economy macroeconomic model and its implications for domestic investment, net capital outflow, and net exports.

Identify the roles of government budget deficits and surpluses in the open-economy macroeconomic model.

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