By using open market operations, the Federal Reserve
A) adjusts the supply of reserves to keep the federal funds interest rate equal to its target.
B) controls banks' demand for reserves, thereby keeping the federal funds rate equal to its target.
C) adjusts the demand of reserves to keep bank rates in line with the federal funds rate target.
D) adjusts the supply and demand of reserves to keep the federal funds interest rate equal to its target.
E) None of the above answers is correct.
A
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You have the following demand equation for a pack of cigarettes: Q = 200 - 0.30P with the average quantity 3 packs and average price $3.00 per pack. What is the price elasticity?
A) 0.30 B) -0.30 C) 1.0 D) -1.0
Prices tend to increase when there is a situation of shortage in a market
a. True b. False Indicate whether the statement is true or false
The government performs each of the following economic functions except
A. collecting taxes. B. spending. C. issuing regulations. D. operating the price mechanism.
What reduces the size of the government purchases multiplier?
What will be an ideal response?