Assume That the Treasury Experiences a Large Increase in the Budget

question 79

Multiple Choice

Assume that the Treasury experiences a large increase in the budget deficit and issues a large number of T-bills. This action will ____ the supply of T-bills in the market and place ____ pressureon the yield of T-bills.

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

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Definitions:

Debt to Assets

A financial ratio that measures the proportion of a company’s total debt to its total assets, indicating the degree of leverage.

Financed by Creditors

A phrase indicating that a portion of a company's funding or assets has been obtained through borrowing from lenders.

Total Assets

The sum of all owned resources (assets) that have economic value which a company or individual possesses.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects revenue from its customers by comparing net credit sales to average accounts receivable.