When the Fed Buys Bonds,it Increases the Demand for Bonds,which

question 120

Multiple Choice

When the Fed buys bonds,it increases the demand for bonds,which pushes:

• A) up the price of bonds,thus raising the interest rate.
• B) up the price of bonds,thus lowering the interest rate.
• C) down the price of bonds,thus raising the interest rate.
• D) down the price of bonds,thus lowering the interest rate.

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Definitions:

Advertising Budget

The amount of money a business plans to spend on marketing and promotion activities.

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating how much contributes to covering fixed costs and generating profit.

Variable Expense Ratio

A financial metric that measures variable costs as a percentage of sales, reflecting how those costs fluctuate with production output.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in sales volume, indicating the level of fixed costs in the business structure.