Suppose the U

question 42

Multiple Choice

Suppose the U.S.Treasury issued $50 billion of short-term securities and sold them to the public.Other things held constant,what would be the most likely effect on short-term securities' prices and interest rates?

• A) Prices and interest rates would both rise.
• B) Prices would rise and interest rates would decline.
• C) Prices and interest rates would both decline.
• D) Prices would decline and interest rates would rise.
• E) There is no reason to expect a change in either prices or interest rates.

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Definitions:

Financial Statements

Formal records of the financial activities and condition of a business, organization, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Intangible Asset

An asset that lacks physical substance but is still identifiable and provides economic value to the business, such as patents or trademarks.

Amortization

The process of spreading the cost of intangible assets over their useful life, or gradually paying off debt through a series of fixed payments.

Research Costs

Expenses associated with activities undertaken to discover new knowledge, develop new products or processes, without assurance of commercial success.