Open market operations involve
A) the buying and selling of existing corporate bonds.
B) the buying and selling of existing corporate stocks.
C) the buying and selling of existing federal government bonds.
D) the buying and selling of Federal Reserve bonds.
Answer: C) the buying and selling of existing federal government bonds.
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Crowding out is most likely to occur when the federal government
A. Runs a deficit and raises taxes to generate more revenue. B. Runs a surplus and pays off part of the debt. C. Has a balanced budget and refinances a portion of the debt that matures. D. Runs a deficit and sells bonds to make up the difference.
Other things equal, a monopolist will hire
A) more workers than a perfectly competitive industry. B) fewer workers than a perfectly competitive industry. C) more workers than a perfectly competitive firm. D) the same number of workers as a perfectly competitive industry would.
A patent on a product gives a firm
A) protection from having the invention copied or stolen for a period of 20 years. B) economies of scale in producing the product. C) excessive profits in the long run. D) the power to impose a tariff on a competing product.
When the Fed buys government bonds on the open market,
A. the market rate of interest on government bonds are lowered AND the market rate of interest on corporate bonds are lowered. B. the market rate of interest on corporate bonds are increased. C. government yields drop but corporate yields rise. D. government and corporate yields rise.