Question

In the speculative demand theory, interest rates and bond prices are ______ related; as such an increase in interest rates will lead to a ______ on bond holdings.

A) inversely; capital gain B) positively; capital gain C) inversely; capital loss D) not; capital loss

According to the base-multiplier approach to the money supply, an increase in the currency/deposit ratio will _________ the money multiplier and thus _______ the total money
supply.

A) decrease; decrease B) increase; increase C) decrease; not change D) increase; not change