Assume That the Treasury Experiences a Large Increase in the Budget

question 19

Multiple Choice

Assume that the Treasury experiences a large increase in the budget deficit and issues a large number of short-term securities (Treasury bills or T-bills) . This action will ____ the supply of T-bills in the market and place ____ pressure on the yield of T-bills.

• A)decrease; downward
• B)decrease; upward
• C)increase; upward
• D)increase; downward

Describe common psychological buying needs.

Understand the personal influences on consumers' buying behavior.

Relate buying decisions to customer involvement and provide examples.

Comprehend the levels of need awareness in the buying process.

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Definitions:

Face Value

The nominal or original value stated on a security or financial instrument, such as a bond or stock, at the time of its issue.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan amount.

Effective-Interest Method

A method of calculating the amortized cost of a bond and the interest expense over its life, reflecting the actual market rate.

Bond Interest Expense

The cost associated with borrowing through bond issues, representing the periodic payments made to bondholders during the life of the bond.