In the above figure, the slope across the arc between b and c is
A) 1/2.
B) 2/3.
C) 1.
D) 2.
C
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The main difference between a repo and federal funds transaction is that
A) the repo transaction uses the securities for collateral while the federal funds transaction does not have collateral. B) the federal funds transaction uses securities for collateral while the repo transaction does not have collateral. C) the repo transaction has an agreed upon interest rate while the federal funds transaction has a spread between the sale and purchase price of securities. D) the federal funds transaction is normally overnight while the typical repo agreement is for 90 to 180 days.
By requiring that policyholders pay a deductible on a claim, insurers guard against
a. symmetrical information b. adverse selection c. natural selection d. moral hazard e. the winner's curse
The tools of Fed monetary policy, in order from most frequently to least frequently used, are
a. open market operations, discount rate changes, and legal reserve requirement changes b. open market operations, legal reserve requirement changes, and discount rate changes c. discount rate changes, legal reserve requirement changes, and open market operations d. legal reserve requirement changes, open market operations, and discount rate changes e. legal reserve requirement changes, discount rate changes, and open market operations
When a tax is placed on the buyers of tennis racquets, the size of the tennis racquet market
a. and the price paid by buyers both decrease. b. decreases, but the price paid by buyers increases. c. increases, but the price paid by buyers decreases. d. and the price paid by buyers both increase.