If the First National Bank has a gap equal to a negative $30 million, then a 5 percentage point increase in interest rates will cause profits to
A) increase by $15 million.
B) increase by $1.5 million.
C) decline by $15 million.
D) decline by $1.5 million.
Answer: D
Economics
- If the Federal Reserve creates new money to finance the government's deficit, then it is monetizing the deficit.(True/False)
- If the current price is above equilibrium price in a competitive market, we should expect a shortage of the product.(True/False)
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- Prices help to determine the opportunity cost of a purchase.(True/False)
- The equilibrium price is where supply and demand curves intersect.(True/False)
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