25. The elimination of a riskless profit opportunity in a market is called

A) the efficient market hypothesis.

B) random-walk.

C) arbitrage.

D) market fundamentals.

E) a dream come true

26. If the Fed wants to permanently lower interest rates, then it should raise the rate of money growth if

A) there is fast adjustment of expected inflation.

B) there is slow adjustment of expected inflation.

C) the liquidity effect is smaller than the expected inflation effect.

D) the liquidity effect is larger than the other effects.

E) Call PK or do all the above.

27. When the quantity of bonds demanded equals the quantity of bonds supplied there is

A) excess supply.

B) excess demand.

C) market equilibrium.

D) asset market approach.

E) more movie goers to 007.

28. Determining asset prices using stocks of assets rather than flow is called

A) asset transformation.

B) expected return.

C) asset market approach.

D) market equilibrium.

E) Dartboard method.