The figure above shows the market for bank reserves in Futureland
If the Bank of Futureland lowers the target federal funds rate by 1 percentage point, the central bank will conduct an open market ________ of government securities of ________ to ________ the supply of reserves.
A) purchase; $25 billion; decrease
B) sale; $25 billion; increase
C) sale; $75 billion; decrease
D) purchase; $75 billion; increase
E) purchase; $25 billion; increase
E
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Why does each of these gas stations have so little control over the price of the gasoline they sell?
What will be an ideal response?
One reason why nations trade is because
a. trading provides opportunities to earn profits. b. the rate of interest is not the same in all countries. c. resources are not equally distributed to all nations. d. some nations like to build one thing while others like to build another.
A law establishing a maximum legal price for a good or service is known as
a. an equilibrium price. b. a price floor. c. a price ceiling. d. a price wall.
The Coase theorem suggests that private markets may not be able to solve the problem of externalities
a. if the government does not become involved in the process. b. when the number of interested parties is large and bargaining costs are high. c. if the firm in the market is a monopoly. d. if some people benefit from the externality.