QUESTION 15

Which of the following statements is NOT correct?

The demand for bonds ___________________.

	A.	increases when the investor is wealthier.
	B.	increases when the yield on the bond increases.
	C.	increases when the yield of an alternative investment decreases.
	D.	increases when the risk of an alternative investment increases.
	E.	None of the above statements is incorrect.

Which of the following actions decreases the stock of reserves and is NOT a decision by the central bank?

	A.	The government pays social benefits to households.
	B.	Commercial banks pay back a loan to the central bank.
	C.	The central bank implements the first stage of a reverse repo with commercial banks.
	D.	A commercial bank pays back an interbank loan.
	E.	None of the above actions qualify.