The Fed can raise the target for the federal funds rate by selling government bonds in the open market.
a. true
b. false
Ans: a. true
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Which of the following statements is FALSE?
A) The federal budget deficit in 2004 was about 4 percent of the GDP. B) During the past five years, the U.S. public debt has been increasing. C) The public debt of $25 billion is the accumulated debt of all U.S. individuals, firms, and institutions. D) A budget deficit of $25 billion in a given year increases the public debt by $25 billion.
You are told that the price elasticity of demand for widgets is -0.75, the income elasticity of widgets is 2, and the cross-price elasticity of widgets and gadgets is 4. Carefully explain what information you can gather from each of these figures
What will be an ideal response?
If the government wishes to increase GDP by $1,200b, and the MPC is 0.75, it should:
A. increase its spending by $300b. B. decrease its spending by $300b. C. increase its spending by $900b. D. decrease its spending by $900b.
Briefly contrast the situation where losses will be the smallest for a perfectly competitive firm based on total revenues with another situation where losses for a perfectly competitive firm will be smallest based on marginal revenue