When the Federal Reserve Banks decide to buy government bonds from banks and the public, the supply of reserves in the Federal funds market:
A. Increases and the Federal funds rate decreases
B. Increases and the Federal funds rate increases
C. Decreases and the Federal funds rate decreases
D. Decreases and the Federal funds rate increases
A. Increases and the Federal funds rate decreases
You might also like to view...
In the short run, if a perfectly competitive firm is producing at a price above average total cost, its economic profit must be:
a. positive. b. zero. c. negative. d. normal.
If Fredonia has a closed economy, it ________ with other countries.
A. trades B. does not negotiate C. prevents its citizens from traveling to other countries but trades D. does not trade
The practice of price discrimination is associated with pure monopoly because:
A. it can be practiced whenever a firm's demand curve is downsloping. B. monopolists have considerable ability to control output and price. C. monopolists usually realize economies of scale. D. most monopolists sell differentiated products.
An asset is liquid if it
A. is of intrinsic value. B. can be exchanged for other goods and services. C. can be obtained or disposed of without losing much of its nominal value. D. is a store of value.