Which of the Following Pairs of Events Will Definitely Lead

question 65

Multiple Choice

Which of the following pairs of events will definitely lead to a decrease in the equilibrium interest rate?

• A)the purchase of government securities by the Federal Reserve and a increase in the level of nominal aggregate output
• B)an increase in the discount rate and an increase in the price level
• C)a decrease in the required reserve ratio and a decrease in the level of nominal aggregate output
• D)the sale of government securities by the Federal Reserve and a decrease in the price level

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Definitions:

Operating Lease

A lease agreement that allows for the use of an asset but does not convey rights of ownership of the asset.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its expected useful life in equal annual amounts.

Operating Lease

A leasing agreement for short-term use of an asset, where the lessor retains risks and benefits of ownership.

Lessor

The owner of an asset that is leased to another party, referred to as the lessee.