In practice, the Federal Reserve keeps the discount rate close to the ________ rate in order to avoid large swings in borrowed reserves by banks
A) inflation B) prime
C) six-month Treasury bill D) federal funds
D
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The figure above shows how the PPF for cell phones and new cell-phone factories can expand. In the figure, if the economy chose the point on this year's PPF that is below point K, the next year's PPF would
A) shift inward along the vertical axis. B) shift outward along the horizontal axis farther than the new PPF shown in the figure. C) shift outward along the vertical axis, not along the horizontal axis. D) shift outward along the horizontal axis, but not as far as the new PPF shown in the figure. E) shift inward along the horizontal axis. The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies.
Inflation is best described as a situation in which
A) relative prices are changing. B) some prices are rising faster than others. C) relative prices are changing, but the purchasing power of the dollar is unchanged. D) the average of all prices are on a sustained rise over a period of time.
International capital flows strengthen
A. monetary policy and have no effect on fiscal policy. B. monetary policy but weaken fiscal policy. C. monetary and fiscal policy. D. fiscal policy but weaken monetary policy.
When marginal cost is positive, total cost is ________ as output increases.
A) increasing
B) decreasing
C) constant
D) negative
E) undefined