The Fed's countercyclical policy during expansion and prosperity includes:
A. raising the required reserve ratio, raising the discount rate, and selling government bonds on the open market.
B. raising the required reserve ratio, raising the discount rate, and buying government bonds on the open market.
C. raising the required reserve ratio, cutting the discount rate, and selling government bonds on the open market.
D. lowering the required reserve ratio, cutting the discount rate, and buying government bonds on the open market.
Answer: A
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In the figure above, using the midpoint method, the price elasticity of demand when the price falls from $7 to $6 is equal to
A) 2.50. B) 1.63. C) 0.40. D) 0.62. E) 1.00.
Comment on the following statement: "A decrease in supply will lead to an increase in the price which decreases demand, thus lowering price. Therefore, a decrease in supply has no effect on the price of a good."
What will be an ideal response?
Can the Federal Reserve achieve both low inflation and low levels of unemployment? Explain
What will be an ideal response?
Firm X owns both a grocery store and the parking lot outside the grocery store. In order to increase the traffic at the store, the store should
a. Decrease the prices on the goods sold in the store b. Increase the parking rates c. All of the above d. None of the above