Which of the Following Statements Is True

question 201

Multiple Choice

Which of the following statements is true?

• A) Bond prices and the interest rate are inversely related.
• B) A lower interest rate raises the opportunity cost of holding money.
• C) The supply of money is directly related to the interest rate.
• D) The total demand for money is directly related to the interest rate.

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Definitions:

Externalities Criteria

Standards used to evaluate the unintended consequences of economic activities on third parties not directly involved in the transaction.

Social Institutions

Structures and mechanisms of social order and cooperation governing the behavior of a set of individuals within a given human community.

Global Economy

The interconnected worldwide economic activities that determine the production, distribution, and consumption of goods and services.

Tax Exemption

A monetary exclusion that reduces the taxable income of an individual or organization, often granted by government policy.