Of the three primary tools the Federal Reserve uses to conduct monetary policy, the tool used most often is
A) open market operations.
B) discount policy.
C) setting reserve requirements.
D) acting as the lender of last resort.
E) check clearing.
Answer: A
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A decrease in expected inflation will
A) increase the natural rate of unemployment. B) shift the short-run Phillips curve to the left. C) shift the long-run Phillips curve to the left. D) reduce real wages.
For a firm to maximize total profits through price discrimination, it should
a. charge a low price to high-value consumers and a high price to low-value consumers b. charge a high price to high-value consumers and a high price to low-value consumers c. charge a low price to high-value consumers and a low price to low-value consumers d. charge a high price to high-value consumers and a low price to low-value consumers
If marginal revenue on the tenth unit of output equals $4 for a non-discriminating, profit-maximizing monopolist, then price: a. equals $4
b. is less than $4. c. is greater than $4. d. must be equal to average total cost.
If the MPC is 0.5, then the spending multiplier must be:
A. 1.2. B. 2. C. 2.25. D. 2.5.