Economic conditions in Fredland have caused the demand for money to increase which has changed the nominal interest rate. If the central bank wants to counteract this change, which of the following is an appropriate open market operation to achieve that? Select one: O a. Raise the discount rate. O b. Increase taxes. O c. Decrease the reserve requirement. O d. Sell bonds. O e. Buy bonds.

(a) “Both banks and the bond market complete maturity transformation although they accomplish the task differently.” True or false? Explain. (b) “Banks are middlemen that insert themselves into transactions between borrowers and savers.” True or false? Explain. (c) “When bond prices rise, interest rates (i.e., bond yields) also rise.” True or false? Explain.

I am currently working on a study guide and came across the following question.  Which of the following statements correctly reflects the effects of granting credit to customers? a) total revenues may increase if both the quantity sold and the price per unit increase when credit is granted b) a firm's cash cycle generally increases if credit is granted, all else equal c) both the cost of default and the cost of discounts must be considered before granting credit d) a firm may have to increase its borrowing if it decides to grant credit to its new customers e) all of the above   My professor stated that the answer is all of the above, but after going through the readings and resources provided I could not find a way to understand how each answer is considered to be correct. I also e-mailed my professor and am waiting for a response, so I decided to post my question here as well.

The prime interest rate Multiple Choice is lower than the federal funds rate because it is the rate charged to a bank's most creditworthy customers. is influenced by Fed policies that change the money supply. usually is at the same as the federal funds rate. is a benchmark interest rate set directly by the Fed.