Which of the following statements regarding supply/demand and interest rates is true? a. If the supply of funds increases, the interest rates decrease. b. If the supply of funds decreases, the interest rates decrease. O c. If the demand for funds decreases, the interest rates increase. d. If the demand for funds increases, the interest rates decrease. Which of the following statements regarding liquidity is true? O a. Financial assets are more liquid than real assets. O b. All assets have the same degree of liquidity. O c. Liquidity reduces as the asset is closer to maturity. O d. Treasury securities have the least liquidity. The real risk-free rate of interest is the rate that O a. reflects the maturity risk of an asset. b. would exist when inflation is zero. O c. incorporates the credit rating of an asset. d. would exist when liquidity is maximum. The interest rate on five-year Treasury bonds is 5.3%, the rate on six-year T-bonds is O a. 7.9% b. 5.3% c. 5.5% d. 8.5% Which of the following statements about the foreign trade deficit is true? a. The smaller the trade deficit, the more a country must borrow. O b. A trade deficit hinders measures to combat recession. O c. A trade deficit reduces the interest rates. d. A trade deficit occurs when a country's exports are greater than its imports. Which of the following statements regarding the cost of money (interest rate) is true? O a. The cost of money has no impact on the price of bonds. b. When rates in the financial markets increase, the prices (values) of financial assets decrease. C. When rates in the financial markets increase, the prices (values) of financial assets increase. d. The cost of money has no impact on the price of stock