In conducting quantitative easing, the Fed may decide to purchase mortgage securities to do all of the following EXCEPT:
A. affect long-term interest rates.
B. influence average home prices.
C. reduce interest rates on home purchases.
D. increase the amount of bank reserves.
Ans: B. influence average home prices.
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In the United States decisions to increase interest rates are made by the ________ and decisions to increase taxes are made by ________.
A. Congress; the Federal Reserved. B. the Federal Reserve; Congress C. Congress; Congress D. the Federal Reserve; the Federal Reserve
Mountain bikers and rollerbladers share the only trail in a city park. The city allows everyone into the park and onto the trail. The mountain bikers say the rollerbladers are a hazard to them; the rollerbladers say it's the other way around. Frequently there are collisions, and many injuries occur. What is the property rights problem?
a. Rollerbladers do not have mountain bikes. b. Bikers do not have rollerblades. c. No one owns both bikes and blades. d. No one has property rights to the use of the trail. e. No one owns the park.
Increasing GDP generally causes increases in problems of waste disposal.
Answer the following statement true (T) or false (F)
Suppose most people had anticipated that inflation would be 3% in the coming year because the Fed would increase the money supply by 3%. Instead, the Fed increases the money supply by 5%. In the short run, this would cause actual output to be ________ full-employment output and prices to increase by ________ 3%.
A. above; more than B. below; more than C. below; less than D. above; less than