If the Fed Decides to Buy T-Bills, It Increases the Demand

question 82

Multiple Choice

If the Fed decides to buy T-bills, it increases the demand for T-bills.How will this affect the price of T-bills and the interest rate?

• A)T-bill prices fall and interest rates fall.
• B)T-bill prices rise and interest rates rise.
• C)T-bill prices rise and interest rates fall.
• D)T-bill prices fall and interest rates rise.

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Definitions:

Ecstasy

A profound feeling of overwhelming happiness or joy; also a common name for MDMA, a psychoactive drug known for inducing euphoria and empathy.

LSD

Lysergic acid diethylamide, a powerful hallucinogenic drug that alters perception, thoughts, and feelings.

Hallucinations

Perceptions in a conscious and awake state in the absence of external stimuli that have qualities of real perception.

Pain-killing Neurotransmitters

Chemical substances in the nervous system that reduce the sensation of pain, such as endorphins.