Question

Federal Open Market Operations have a greater impact on treasury yields than credit card rates. (True/False)

Under the quantity theory of money, if P decreases, V and M are unchanged, then Y must have increased. (True/False).

f a country has a budget surplus and savings is less than investment, then exports must be greater than imports. (True/False)

As exports increase, the income from those exports becomes available for domestic investment, increasing the supply of funds? (True/False).

Answer 1

1. The correct answer is True.

Because open market operation refers to buying and selling of government securities by the central bank from/to the public and commercial bank which directly impact on treasury yield than credit card rates

2. The correct answer is True.

Because according to quantity theory of money M×V = P×Y ,so when M and V is constant and price level decreases the Y(income) Increases.

3. The correct answer is True.

Because when investment is greater than saving the planned inventory is above the desired level due to which export must be more than import.

4. The correct answer is True.

Because when export increases the income increase from those export causes increase in savings and when saving increases the future investment also increases.