Which of the following statements is true about bonds?1) A bond's dollar price is calculated as a growth rate.2) The dollar price and interest rate of a bond have a positive relationship.3) Bonds can never default.4) The dollar price and interest rate of a bond have an inverse relationship.5) Bonds are ownership shares in a firm. Suppose Dennis deposits $750 that he found floating down to the earth from thesky into the financial system. Assuming a 25% reserve ratio, that all banks lend allexcess reserves, and that all loans are redeposited into the banking system, howmuch money will be created by Dennis's act?Only the central bank can create money, so this act will not affect the1)amount of money in the economy.O2) $750 will be created.3) $1000 will be created.4) $3000 will be created.

A financial instrument refers to any tradable asset or contract that represents a monetary value or…

Which of the following statements is true about bonds? 1) A bond's dollar price is calculated as a growth rate. 2) The dollar price and interest rate of a bond have a positive relationship. 3) Bonds can never default. 4) The dollar price and interest rate of a bond have an inverse relationship. 5) Bonds are ownership shares in a firm.

Which of the following statements is true about bonds? 1) A bond's dollar price is calculated as a growth rate. 2) The dollar price and interest rate of a bond have a positive relationship. 3) Bonds can never default. 4) The dollar price and interest rate of a bond have an inverse relationship. 5) Bonds are ownership shares in a firm.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter26: Monetary Policy

Section: Chapter Questions

Problem 3SQP

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