1. When the central bank decreases the money supply, we expect interest rates a. and stock prices to rise. b. and stock prices to fall. c. to rise and stock prices to fall. d. to fall and stock prices to rise.

Question

Question

1. When the central bank decreases the money supply, we expect interest rates a. and stock prices to rise. b. and stock prices to fall. c. to rise and stock prices to fall. d. to fall and stock prices to rise.

1. When the central bank decreases the money supply, we expect interest rates

a. and stock prices to rise.

b. and stock prices to fall.

c. to rise and stock prices to fall.

d. to fall and stock prices to rise.

microeconomic

Add a comment Improve this question Transcribed image text

Answer 1

Similar Homework Help Questions

We expect real interest rates to rise when a. the supply of loanable funds is greater...

We expect real interest rates to rise when a. the supply of loanable funds is greater than the demand b. output is less than the natural rate c. None of the listed options is correct. d. inflation is less than the Fed’s target rate
What happens when the price level rises? a. Interest rates rise, so firms increase investment. b. Interest rates...

What happens when the price level rises? a. Interest rates rise, so firms increase investment. b. Interest rates rise, so firms decrease investment. c. Interest rates fall, so firms increase investment. d. Interest rates fall, so firms decrease investment. 44. Which of the following shifts money demand to the left? a. an increase in the price level b. a decrease in the price level c. an increase in the interest rate d. a decrease in the interest rate 45. If the world real interest rate exceeds the Canadian real interest...
QUESTION 20 and output will In the short run, if the central bank decreases the money...

QUESTION 20 and output will In the short run, if the central bank decreases the money supply, the currency will O A. appreciate; rise B. depreciate; fall OC. appreciate; fall D. depreciate; rise Click Save and Submit to save and submit. Click Save All Answers to save all answers. MacBook Pro Search or type URL

Question 1 1). When the central bank raises the interest rates, then generally a. bond prices...

Question 1 1). When the central bank raises the interest rates, then generally a. bond prices increase and stock prices decrease b. bond prices decrease and stock prices increase c. bond prices and stock prices tend to decrease d. bond prices and stock prices tend to increase P.S. is the correct answer "c" option? pls explain. 2). Which of the following must be true regarding the bond described by the cash flow stream (-100, 5, 105)? (select all that apply)...
An increase in the Money Supply: Select one: O a. leads to a fall in prices...

An increase in the Money Supply: Select one: O a. leads to a fall in prices and an increase in consumption, shifting the AD to the left O b.leads to an increase in net exports, shifting the AS to the right O c. leads to a fall in interest rates and a consequent increase in investment, shifting the AD to the right O d. none of the above if a country that is a trade partner of ours falls into...
The sum of currency and bank deposits at the central bank is called: a. the money...

The sum of currency and bank deposits at the central bank is called: a. the money supply. b. domestic assets. c. the monetary base. d. fractional reserves. Official intervention in the foreign exchange market to defend a fixed exchange rate when the value of the country's currency is under downward pressure causes a. international reserve holdings to rise. b. a downward pressure on the country's interest rates. c.an increase in the liabilities of the central bank. d. the domestic money...

"The money supply of an economy increases when the central bank simultaneously decreases the reserve requirement...

"The money supply of an economy increases when the central bank simultaneously decreases the reserve requirement and sells government bonds in open market." Explain whether this statement is true, false or uncertain. (6 marks) What should money growth rate be if real output grows 4% per year, velocity grows 2% per year, and the central bank targets inflation to be 2% per year? (4 marks) What is the inflation tax? Explain. (6 marks) Explain (with the aid of diagrams) whether...
An increase in the money supply causes: Group of answer choices interest rates to rise, investment...

An increase in the money supply causes: Group of answer choices interest rates to rise, investment spending to rise, and aggregate demand to rise interest rates to fall, investment spending to fall, and aggregate demand to fall interest rates to fall, investment spending to rise, and aggregate demand to rise interest rates to rise, investment spending to fall, and aggregate demand to fall
3. Suppose that prices are completely rigid, so that the nominal and the real interest rate...

3. Suppose that prices are completely rigid, so that the nominal and the real interest rate are necessarily equal. Money-market equilibrium is therefore given b L(r,Y). a. Suppose that government purchases increase, and that the central bank adjusts the money supply to keep the interest rate unchanged. i. Does the money supply rise or fall? ii. What happens to consumption and investment? b. Suppose that government purchases increase, and that the central bank adjusts the money supply to keep output...

When people expect interest rates to fall in the future, the _____ curve for bonds shifts...

When people expect interest rates to fall in the future, the _____ curve for bonds shifts to the _____. A. supply; right. B. demand; left. C. supply; left. D. demand; right.

1. When the central bank decreases the money supply, we expect interest rates a. and stock prices to rise. b. and stock prices to fall. c. to rise and stock prices to fall. d. to fall and stock prices to rise.

Homework Answers

Request Answer!

Add Answer to:
1. When the central bank decreases the money supply, we expect interest rates a. and stock prices to rise. b. and stock prices to fall. c. to rise and stock prices to fall. d. to fall and stock prices to rise.

Post as a guest

Earn Coins

We expect real interest rates to rise when a. the supply of loanable funds is greater...

What happens when the price level rises? a. Interest rates rise, so firms increase investment. b. Interest rates...

QUESTION 20 and output will In the short run, if the central bank decreases the money...

Question 1 1). When the central bank raises the interest rates, then generally a. bond prices...

An increase in the Money Supply: Select one: O a. leads to a fall in prices...

The sum of currency and bank deposits at the central bank is called: a. the money...

"The money supply of an economy increases when the central bank simultaneously decreases the reserve requirement...

An increase in the money supply causes: Group of answer choices interest rates to rise, investment...

3. Suppose that prices are completely rigid, so that the nominal and the real interest rate...

When people expect interest rates to fall in the future, the _____ curve for bonds shifts...

1. When the central bank decreases the money supply, we expect interest rates a. and stock prices to rise. b. and stock prices to fall. c. to rise and stock prices to fall. d. to fall and stock prices to rise.

Homework Answers

Request Answer!

Add Answer to: 1. When the central bank decreases the money supply, we expect interest rates a. and stock prices to rise. b. and stock prices to fall. c. to rise and stock prices to fall. d. to fall and stock prices to rise.

Post as a guest

Earn Coins

Add Answer to:
1. When the central bank decreases the money supply, we expect interest rates a. and stock prices to rise. b. and stock prices to fall. c. to rise and stock prices to fall. d. to fall and stock prices to rise.