B increase the long term interest rates C lower the short term interest rates D

B increase the long term interest rates c lower the

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B) increase the long term interest rates. C) lower the short term interest rates. D) increase the short term interest rates. 25) A short - term debt instrument issued by well - known corporations is called A) corporate bonds. B) commercial paper. C) municipal bonds. D) commercial mortgages. 26) The monetary base consists of A) currency in circulation and the U.S. Treasury's monetary liabilities. B) currency in circulation and reserves.
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C) reserves and Federal Reserve Notes. D) currency in circulation and Federal Reserve notes. 27) If stock prices are expected to drop dramatically, then, other things equal, the demand for stocks will ________ and that of Treasury bills will ________. A) increase; decrease B) decrease; increase C) decrease; decrease D) increase; increase 28) The reduction in transactions costs per dollar of investment as the size of transactions increases is A) economies of trade. B) discounting. C) economies of scale. D) diversification. 29) When the Fed extends a $100 discount loan to the First National Bank, reserves in the banking system A) increase by $100. B) increase by more than $100. C) decrease by $100. D) decrease by more than $100. 30) When financial institutions go on a lending spree and expand their lending at a rapid pace they are participating in a A) market race.
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B) credit bust. C) credit boom. D) deleveraging. 31) Suppose that your marginal federal income tax rate is 30%, and the yield on thirty - year U.S. Treasury bonds is 10%. You would be indifferent between buying a thirty - year Treasury bond and buying a thirty - year municipal bond issued within your state (ignoring differences in liquidity, risk, and costs of information) if the municipal bond has a yield of A) 10.0%. B) 7.0%. C) 6.5%. D) 9.5%. 32) If 1 - year interest rates for the next three years are expected to be 1, 1, and 1 percent, and the 3 - year term premium is 1 percent, than the 3 - year bond rate will be A) 1 percent. B) 2 percent. C) 3 percent. D) 4 percent. 33) From before the financial crisis began in September of 2007 to when the crisis was over at the end of 2009, the huge expansion in the Fed's balance sheet and the monetary base did not result in a large increase in monetary supply because A) the Fed also increased the required reserve ratio. B) most of it just flowed into holdings of excess reserve. C)
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the Fed also conducted open market sales. D) the discount loan decreased. 34) Everything else held constant, in the market for reserves, when the federal funds rate is 1%, increasing the interest rate paid on excess reserves from 1% to 2% A) lowers the federal funds rate. B) raises the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate. 35) According to the law of one price, if the price of Colombian coffee is 80 Colombian pesos per pound and the price of Brazilian coffee is 10 Brazilian reals per pound, then the exchange rate between the Colombian peso and the Brazilian real is A) 100 pesos per real.
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