Author Question: Identify the correct statement. a. It is absolutely compulsory for the government to earn a ... (Read 27 times)

vHAUNG6011 · **on:** Jun 30, 2018

Identify the correct statement.
a. It is absolutely compulsory for the government to earn a profitable return on the money it earns by selling bonds.
b. When government borrowing rises, interest rates decline, thereby driving up private investment.
c. When interest rates rise, fewer number of corporations offer new bonds to raise investment funds.
d. An increase in interest rate reduces the cost of borrowing by the firms.
e. When interest rates fall, the firm's cost of raising funds through bonds increases.

Question 2

An increase in the price of a good will
a. increase supply.
b. decrease supply.
c. increase quantity supplied.
d. decrease quantity supplied.