|
A. Interest rates will be unaffected. |
|
|
B. |
Interest rates will decrease. |
|
C |
Interest rates will increase. |
|
D |
Interest rates could increase or decrease. |
Homework Answers
This tax cut will increase the income of the people and increase the demand for the money shifting the money demand curve to the right and the new equilibrium will be a at a higher interest rate. the answer is "C".
Add Answer to:
A. Interest rates will be unaffected.
B.
Interest rates will decrease.
C
Interest rates will increase....
Question 8 (1 point) Consider the market for money illustrated in the figure below. What is...
Question 8 (1 point) Consider the market for money illustrated in the figure below. What is the effect of an increase in government spending on interest rates? MS Interest Rate, i MD M Quantity of Money, M (billions of dollars) MD1 Mi Quantity of Money, M (billions of dollars) O Interest rates will decrease. O Interest rates will remain unchanged. O Interest rates will increase. O Interest rates may increase or decrease.
On March 15, 2017, Federal Reserve Chairman Janet L. Yellen announced the Federal Reserve was raising...
On March 15, 2017, Federal Reserve Chairman Janet L. Yellen announced the Federal Reserve was raising its benchmark rate (the federal funds rate) by a quarter of a percentage point (to a range of 0.75-1.00 percent). This was the third time the Fed has raised rates after the Great Recession. Consider the market for money illustrated in the figure below. Assume the market initially just prior to March 15, 2017) is in equilibrium at point A. Describe the effects of...
Expansionary fiscal policy ________________ to fight______________. increase the money supply and cut interest rates, recession. decrease...
Expansionary fiscal policy ________________ to fight______________. increase the money supply and cut interest rates, recession. decrease the money supply and raise interest rates, inflation. increase government spending and cut taxes, recession. decrease government spending and raise taxes, inflation.
13. If the Fed conducts Open Market Purchase, then: a. price of bonds increase, interest rates decrease and money supply...
13. If the Fed conducts Open Market Purchase, then: a. price of bonds increase, interest rates decrease and money supply decreases. b. price of bonds decrease, interest rates increase and money supply decreases. c. price of bonds increase, interest rates decrease and money supply increases. d. price of bonds decrease, interest rates decrease and money supply increases.
In 2013, Congress approved legislation favored by the Obama administration to increase the income tax rate...
In 2013, Congress approved legislation favored by the Obama administration to increase the income tax rate on high-income taxpayers from 35% to 39%. Using supply and demand analysis, show what happens in the market for Treasury bonds and the market for Municipal bonds to explain how the increase in income tax rates for wealthy people to lower the interest rates on municipal bonds relative to the interest rate on Treasury bonds.
1. Which list contains only things that would make people want to hold more money? a. Interest rates decrease, the price level increases. b. Interest rates decrease, the price level decreases. c. Interest rates increase, the price le
1. Which list contains only things that would make people want to hold more money? a. Interest rates decrease, the price level increases.b. Interest rates decrease, the price level decreases.c. Interest rates increase, the price level increases.d. Interest rates increase, the price level decreases.
If market interest rates increase, investors in corporate bonds will see the current market value of...
If market interest rates increase, investors in corporate bonds will see the current market value of their bonds do what in the secondary market? a. If the market interest rates increase, the coupon rate on the bond increases b. When market interest rates increase, the market value of corporate bonds increase c. Remain the same, because the face value never changes d. When market interest rates increase, the market value of corporate bonds decrease
1: It is reasonable to expect that the supply of any good will _____? A. decrease because of interest rates B. increase...
1: It is reasonable to expect that the supply of any good will _____? A. decrease because of interest rates B. increase when governments decrease tariffs C. increase when the factors of production become less expensive D. decrease with specialization 2:The law of market forces stipulate that two forces work to adjust the price as an automatic market regulator, what are they? A. Completion and monopoly B. Free and planned economic system C. Money and banking D. shortages and surpluses....
At the beginning of his mandate, President Trump proposed as a part of his economic program...
At the beginning of his mandate, President Trump proposed as a part of his economic program a public funded one trillion-dollar spending in infrastructure. This program hasn't been approved yet, but it is believed that could be negotiated during 2019. Also, during December of 2017, the US Congress approved the "Tax cuts and jobs act". Between many changes to the tax code, the main highlights of this law are a permanent cut to the top corporate tax rate from 38%...
If interest rates in the overall economy increase to 8 percent, which of the following is...
If interest rates in the overall economy increase to 8 percent, which of the following is the market value of a $ 1,000 corporate bond with a fixed interest rate of 6 percent most likely?
Question 8 (1 point) Consider the market for money illustrated in the figure below. What is the effect of an increase in government spending on interest rates? MS Interest Rate, i MD M Quantity of Money, M (billions of dollars) MD1 Mi Quantity of Money, M (billions of dollars) O Interest rates will decrease. O Interest rates will remain unchanged. O Interest rates will increase. O Interest rates may increase or decrease.
On March 15, 2017, Federal Reserve Chairman Janet L. Yellen announced the Federal Reserve was raising its benchmark rate (the federal funds rate) by a quarter of a percentage point (to a range of 0.75-1.00 percent). This was the third time the Fed has raised rates after the Great Recession. Consider the market for money illustrated in the figure below. Assume the market initially just prior to March 15, 2017) is in equilibrium at point A. Describe the effects of...
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