If the Fed is increasing its holdings of government bonds at the same time the federal deficit is increasing,
A. the Fed and the Treasury are, as usual, coordinating activities.
B. crowding out is more likely to occur.
C. the debt is being monetized.
D. the Fed is attempting to increase interest rates.
Answer: C
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The distinguishing feature that determines whether an analysis is classical or Keynesian is
A) the speed of price adjustment. B) the slope of the aggregate demand curve. C) the degree of monopoly power in the economy. D) the assumption about the transmission mechanism of monetary policy.
When Patricia sells her General Motors common stock at the same time that Brian purchases the same amount of General Motors stock from another party, General Motors receives
A) the dollar value of the transaction. B) only the par value of the common stock. C) nothing. D) the dollar amount of the transaction, less brokerage fees.
Assume Brandon's benefit function for water is S(W) = ?W and he consumes water both in droughts, WD, or in the rainy season, WR. Assume his current consumption bundle is WD = 36 and WR = 25 and the probability of drought is 0.75. What is Brandon's expected utility?
A. 5.75 B. 33.25 C. 11 D. 30.5
Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?
a. The benefits are usually easier to measure than the costs. b. Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs. c. Estimating the value of a human life is difficult but necessary to evaluate the proposal. d. Both a and b are correct.