Use the following graph to answer the next question.
If the federal funds market is at equilibrium at point C and the Federal Reserve decides to conduct an open-market sale, then it must be trying to set a ________.
A. lower target federal funds rate by increasing the amount of reserves in the market
B. higher target federal funds rate by increasing the amount of reserves in the market
C. higher target federal funds rate by reducing the amount of reserves in the market
D. lower target federal funds rate by reducing the amount of reserves in the market
Answer: C
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The measure of the cost of a standard basket of goods and services in any period relative to the cost of the same basket of goods and services in the base year is called the:
A. consumer price index. B. consumption cost calculator. C. consumption production index. D. consumer production index.
The major role of a commercial bank is to
A) make mortgage loans. B) sell shares and use the proceeds to buy stocks. C) receive deposits and make loans. D) restrain the growth of the quantity of money.
Two firms make most of the consumer alkaline batteries in the country: Duracell and Energizer. The market for batteries is most likely
A) a monopoly. B) an oligopoly. C) perfectly competitive. D) monopolistically competitive.
Economists often examine GNP to estimate changes in the well being of people. If one only studied GNP, which of the following would lead one to overestimate the true increases in peoples' well being?
a. Decreasing average hours of work b. Increasing life expectancy c. Decreasing levels of pollution d. Decreasing amounts of production in the home e. Increases in product quality