In Figure 15.3, the Fed can change the equilibrium interest rate from 2 percent to 6 percent by doing all of the following except
A. Selling bonds in the open market.
B. Raising the reserve requirement.
C. Decreasing the federal funds rate.
D. Raising the discount rate.
Answer: C
You might also like to view...
Refer to the payoff matrix below. Which of the following is true for Happy Campers?
A) The Low strategy dominates the Middle strategy
B) The High strategy dominates the Low strategy.
C) The Low strategy dominates the High strategy.
D) The Middle strategy dominates the Low strategy.
Assume the graph shown shows Bobbi's budget constraint. If hairbands cost $5, then Bobbi's income to spend on these two items must be:
A. $8.
B. $6.
C. $40.
D. Cannot be determined without more information.
Among the following pairs, which is likely to have the greatest price elasticity of demand? Why?
a. cars or Toyotas b. electricity usage during a month or during a year c. cable television or an apartment rental
When a government subsidy is granted to the buyers of a product, sellers can end up capturing some of the benefit because
a. the market price of the product will fall in response to the subsidy. b. the market price of the product will rise in response to the subsidy. c. the market price of the product will not change in response to the subsidy. d. buyers will reduce their demand for the product.