What activity does the Fed undertake when it carries out open-market operations?
a. It buys and sells the bonds, but not the notes, of leading U.S. corporations
b. It changes the legal reserve requirements for member banks.
c. It changes the discount rate, which generally increases the amount of available credit.
d. It provides funds so that healthy depository institutions can purchase weaker ones on the open market.
e. It deals in the purchase and sale of U.S. government securities.
e
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Suppose that high-definition television sets (HDTVs) are normal goods. Would the compensated demand curve for HDTVs be flatter or steeper than the uncompensated demand curve? Explain your answer using a carefully-labeled graph.
What will be an ideal response?
Splitting money across different investments (diversification) reduces risk but also reduces the rate of return, according to the risk-return principle.
Answer the following statement true (T) or false (F)
Real GDP is $9 trillion in the current year and $8.6 trillion in the previous year. The economic growth rate between these years has been
A) 5.67 percent. B) 4.65 percent. C) 10.31 percent. D) 7.67 percent. E) $0.4 trillion.
Which of the following statements is true?
A. The doctrine of laissez-faire advocates an economic system with extensive government intervention and little individual decision-making. B. In capitalism income is distributed on the basis of need. C. Adam Smith was the father of socialism. D. Most real-world economies are mixed economic systems.