If the interest rate is below the Fed's target, the Fed would
a. buy bonds to increase the money supply.
b. buy bonds to decrease the money supply.
c. sell bonds to increase the money supply.
d. sell bonds to decrease the money supply.
d
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In an open economy in which only two goods are produced and possibly traded, we would find that
a. production occurs where the production possibility curve is tangent to a line with the slope equal to the ratio of the world relative prices. b. production occurs where an indifference curve is tangent to the production possibilities curve. c. consumption occurs where an indifference curve is tangent to the production possibilities curve. d. consumption occurs where the production possibilities curve is tangent to a line with a slope equal to the ratio of the world relative prices.
A Comparison of Macroeconomic Views
If labor market institutions change so that it becomes easier to find a job, and unemployed people are unemployed for smaller durations of time, what would happen to the natural rate of unemployment?
A. It would increase. B. It would remain the same, since the number of workers has not changed. C. It would decrease. D. There is not enough information to determine what would happen.
The Federal Reserve views commercial bank use of the discount window as
A) something to be used only by commercial banks. B) completely up to the borrower. C) a privilege, not a right for eligible borrowers. D) something to be used only in financial panics.