Which of the Following Steps Does Not Belong to the Sequence

question 200

Multiple Choice

Which of the following steps does not belong to the sequence of events reflecting the financing of a large government budget deficit?

• A) The U.S. Treasury sells securities.
• B) The sale of securities drives up interest rates.
• C) Attracted by the high interest rates, foreigners purchase dollars in order to invest in the United States.
• D) The greater demand for the dollar increases its value relative to other currencies.
• E) The rising value of the dollar leads to increased U.S. exports and reduced U.S. imports.

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Definitions:

Call Option

A deal in the financial industry that bestows upon the buyer the latitude, but exempts them from the necessity, to acquire stocks, bonds, commodities, or other assets at a price fixed in advance, within a predetermined time frame.

Warrants

Financial instruments that give the holder the right, but not the obligation, to buy a company's stock at a specific price before a specified date.

Publicly Traded Bonds

Bonds issued by companies or governments that are available for purchase and sale on public stock exchanges.

Long-Term

Pertains to a time frame extending over a significant period, usually beyond one year, often used in the context of investments, loans, and planning.