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

question 82

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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?

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Definitions:

Reasonable Commercial Standards

A legal concept referring to the standard practices and methods used by reasonably prudent and competent parties in a particular industry.

Honesty

The quality of being truthful and free from deceit or fraud.

Holder In Due Course

A legal term for a party that has acquired a negotiable instrument in good faith and for value, and thus has certain protections against defects in title and prior claims.

Consideration

The value (such as money, service, or goods) that is exchanged between parties in a contract, making the agreement legally binding.

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