One of the following is the drawback of local borrowing. Select one: a. None the options are correct b. Triggers inflation c. Raises unemployment d. Sluggish economic growt

Economic conditions in Fredland have caused the demand for money to increase which has changed the nominal interest rate. If the central bank wants to counteract this change, which of the following is an appropriate open market operation to achieve that? Select one: O a. Raise the discount rate. O b. Increase taxes. O c. Decrease the reserve requirement. O d. Sell bonds. O e. Buy bonds.

Country differences, such as differences in the risk-free interest rate and differences in risk premiums across countries, can cause the cost of capital to vary across countries.  The answer to this question in True. Group of answer choices True False

The Promotion of green alternatives will (Select the best choice(A) increase inflation(B) decrease inflation(C) does not directly affect economic growth or cannot be determined

If we hold all other factors the same, an increase in interest rates will: a. Decrease the present value of a stream of constant payments we expect to receive. b. Increase the present value of a stream of constant payments we expect to receive. c. Decrease the interest revenue that a company will earn on its funds that it holds in its interest-bearing checking account. d. No impact on how much a company should be willing to pay for factory equipment that is expected to significantly reduce the factory electricity costs.

All other things being equal, which of the following would cause interest rates to rise?   a. The economy slides into a recession.   b. The federal government's budget deficit declines.   c. The rate of inflation decreases.   d. The Federal Reserve contracts the money supply.

8. Macroeconomic factors that influence interest rate levels Apart from risk components, several macroeconomic factors—such as Federal Reserve (the Fed) policy, federal budget deficit or surplus, international factors, and levels of business activity—influence interest rates. Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false:   Statements True False The larger the federal deficit, other things held constant, the higher are interest rates.       When the economy is weakening, the Fed is likely to increase short-term interest rates.       During recessions, short-term interest rates decline more sharply than long-term interest rates.       The Federal Reserve’s ability to use monetary policy to control economic activity in the United States is limited because US interest rates are highly dependent on interest rates in other parts of the world.

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Regarding the following statements about credit fixed income, identify who is correct (select all that apply):     a. Meeyeon: "Credit spreads tighten when the economy is strong, and there is a continued positive outlook."   b. Andrew: "Subordinated debentures are riskier for investors than senior debt." c. Greg: "The G-spread only measures the credit spread between a bond and a government curve over one point of time." d. Yuting: "Investment-grade credit never defaults."   (only a and b is incorrect)

The focus of the short-run macro model is on the role of   a. spending in explaining economic fluctuations   b. output in explaining economic fluctuations   c. labor in explaining economic fluctuations   d. financial markets in explaining economic fluctuations