Assume That the Treasury Experiences a Large Decrease in the Budget

question 28

Multiple Choice

Assume that the Treasury experiences a large decrease in the budget deficit and purchases a large number of T-bills. This action will ____ the supply of T-bills in the market and places ____ pressure on the yield of T-bills.

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

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Definitions:

Mutual Agency

A principle in partnership where each partner has the authority to bind the partnership in contract agreements with third parties.

Partnership Dissolution

The process of terminating the legal and formal relationships between all partners in a partnership, leading to the cessation of business operations under the partnership structure.

Capital Deficiency

A situation where a company's liabilities exceed its assets, indicating that it does not have enough capital to meet its financial obligations.

Credit Balances

Represent amounts owed to creditors or customers, typically seen in liability, equity, and revenue accounts.