When the Fed sells foreign assets and buy domestic assets at the same time,
A) its assets and liabilities rise by the same amount.
B) its assets and liabilities fall by the same amount.
C) the composition of its assets changes, but its liabilities are unaffected.
D) the composition of its liabilities changes, but its assets are unaffected.
C
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Horizontal equity means that two people in identical economic situations should pay the same amount of taxes
Indicate whether the statement is true or false
Which of the following will result as part of the interest rate effect when the price level rises? a. Households and firms increase their holdings of money
b. Interest rates will increase. c. A lower quantity of real GDP will be demanded. d. All of the above will result as part of the interest rate effect when the price level rises.
The knowledge and skills possessed by the workforce is known as
A. The inequality trap. B. Human capital. C. Human finance. D. Investment capital.
Each year around July 4 the town of Flagston has a controversy over how big a fireworks display they should have on the holiday. The three citizens have the demand functions for fireworks that are shown here. The cost per firecracker is $18. Elmer has the demand function P = 20 - Q. Ethel's demand equation is P = 12 - .6Q, and Edith has the demand P = 8 - .4Q. If the citizens got together for a city referendum on the issue, and each voted for an amount of fireworks, knowing that each would pay their share (1/3) of the cost, how would the vote come out in a majority rule situation? Why is this not the socially efficient amount?
What will be an ideal response?