Which of the Following Is Not a Reason the Expected

question 97

Multiple Choice

Which of the following is not a reason the expected returns on money market funds (MMFs) are low relative to bonds or stocks?

• A)The credit risk of MMFs is normally perceived to be lower than that of corporate bonds.
• B)MMFs have higher interest rate risk than bond funds.
• C)MMFs consistently generate positive returns over time, whereas bond and stock funds can experience negative returns.
• D)All of the above are reasons the returns on MMFs are low relative to bonds or stocks.

Recognize the implications of consumer sentiment on aggregate demand and output.

Distinguish between monetary and fiscal policy.

Explain how fiscal policy affects the economy in both the short and long run.

Understand the role of automatic stabilizers in economic fluctuations.

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Definitions:

Note Payable

A written promise to pay a specified amount of money, usually including interest, by a certain date.