Ch. 6 Determining Market Interest Rates

6: Determining Market Interest Rates

Multiple Choice Questions

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|6-1 | |Which economic issue dominated the 2000 election campaign? |

|Answer: a | |a. What to do with the emerging U.S. budget surplus. |

|Difficulty: M | |b. How to deal with rising unemployment. |

| | |c. How to deal with rising inflation. |

| | |d. How to deal with the declining value of the dollar. |

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|6-2 | |How is the interest rate that prevails in the bond market determined? |

|Answer: c | |a. By the interaction of stock prices and bond prices. |

|Difficulty: E | |b. By the decision of the president, in consultation with Congress. |

| | |c. By demand for and supply of bonds. |

| | |d. By the Board of Governors of the New York Stock Exchange. |

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|6-3 | |In the bond market, the buyer is considered to be...