Pedro is thinking about buying U.S. savings bonds. However, there is a financial institution controlled by the government that may actively discourage Pedro from buying bonds. How and why would such a financial institution do this?
A. Stocks on Wall Street may be doing quite well, encouraging Pedro to invest there instead of buying securities.
B. The U.S. Treasury might refuse to sell securities to Pedro because it does not have any bonds to sell.
C. The Federal Reserve could raise the price of securities, to encourage Pedro to buy other things instead.
D. Banks might raise their interest rates, encouraging Pedro to deposit his money there instead of buying securities.
Answer - D?
3 answers
I suppose that's the best answer from the choices given. I can think of better ones, but they aren't among your choices.
D in not correct, They will not raise their interest rates just to encourage Pedro to deposit money there.
then what is the answer if its not D.