When the Fed sells short-term bonds and buys long-term bonds, it is engaging in
A. a maturity extension program.
B. changing the discount rate.
C. backward guidance.
D. forward guidance.
Answer: A
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Job rationing occurs when the real wage rate is
A) above the equilibrium wage rate so there is a shortage of labor. B) above the equilibrium wage rate so there is an excess supply of labor. C) equal to the equilibrium wage rate so there is no excess supply of labor. D) below the equilibrium wage rate so there is an excess supply of labor. E) Both answers A and D are correct because whenever the real wage rate is above or below the equilibrium wage rate, there is an excess supply of labor.
An increase in labor supply will increase the equilibrium wage rate
a. True b. False
Which of the following is an example of opportunity cost?
a. The Chinese food that you give up when you choose to eat Italian food. b. The tuition that you pay to attend college. c. For a professor of economics, the pleasure that he or she derives from teaching economics. d. Sweets given up by a person who would never eat them even if he or she could. e. The price paid for a ticket when you go for a movie.
Jerry sells cherry sno-cones along the boardwalk in New Jersey. During the summer this is a perfectly competitive business, and Jerry faces a perfectly elastic demand curve. If he wants to try to increase revenues he should
A. raise the price of his sno-cones to make more per sale. B. lower the price of his sno-cones to try to sell more. C. do nothing; there is nothing he can do to increase revenue. D. keep the price the same but produce more to increase sales.