The most frequently used monetary policy tool is
A) buying or selling government securities in the open market.
B) raising or lowering tax rates.
C) changing the discount rate.
D) changing reserve requirements.
A) buying or selling government securities in the open market
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Examining the conditions that could lead to a recession in an economy is an example of a macroeconomic topic
Indicate whether the statement is true or false
In the extended classical model, an unexpected decrease in aggregate demand would cause unanticipated inflation to be ________ and cyclical unemployment to be ________
A) positive; negative B) positive; positive C) negative; negative D) negative; positive
From the four asset bubbles discussed in this chapter, the one that has the smallest impact on the economy is
A) the 1927-29 U.S. stock market bubble. B) the 1987-89 Japanese stock market bubble. C) the 1996-2000 U.S. stock market bubble. D) the 2001-2006 U.S. housing bubble.
Related to the Economics in Practice on p. 318. Producers of Honest Tea add less sugar to their tea than the amount that would maximize consumer's total utility from sugar because
A. the marginal utility to the consumer from adding more sugar is very low (near zero) while the marginal health cost (added calories) is quite high. B. the financial cost of the additional sugar is less than the additional revenue that the firm would earn. C. producers are attempting to differentiate their product from the very sweet Snapple. D. producers are attempting to market their product to diabetics.