Inflationary pressure is a growing problem for the economy. Therefore, the Federal Reserve decides to pursue a policy to reduce the inflationary pressure. Which policy changes by the Fed would reinforce each other to achieve that objective?
a. Buying government securities and lowering the discount rate
b. Selling government securities and lowering the discount rate
c. Selling government securities and raising the discount rate
d. Buying government securities and lowering the reserve ratio
c. Selling government securities and raising the discount rate
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Gross revenue minus explicit costs equals
A) accounting profit. B) implicit cost. C) opportunity cost. D) economic profit.
The structural surplus
A) is legally required to be positive. B) fluctuates over the business cycle. C) is, by definition, equal to the negative of the cyclical deficit. D) equals the actual surplus plus the cyclical surplus. E) is the government budget surplus that would exist if the economy was at full employment.
Betty consumes good x and good y. If the price of x = $3 and the price of y = $4, then
A) an extra unit of x costs 4/3 units of y. B) an extra unit of y costs 4/3 units of x. C) an extra unit of x costs 3/4 units of y. D) Both B and C.
One productivity standard for income distribution stated in the text is
A) income distribution should be based on contribution to society's total output. B) tax payments are higher for higher income people. C) poor people pay too much in taxes. D) the poor should contribute more to society.