In order to raise the federal funds rate, the Fed ________ government securities in open market operations, so that banks' reserves ________ and the quantity of money ________
A) buys; decrease; increases
B) buys; increase; decreases
C) sells; decrease; decreases
D) sells; increase; decreases
E) buys; increase; increases
C
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The table above gives a nation's investment demand and saving supply schedules. It also has the government's net taxes and expenditures. When the real interest rate is 4 percent, the supply of loanable funds is equal to
A) $10 billion. B) $50 billion. C) $90 billion. D) $80 billion. E) $30 billion.
A study discussed in the Making the Connection feature in the text found that there is ________ that some consumers are not well aware of prices, even for goods they buy regularly
A) substantial evidence B) no evidence C) little evidence D) no reason to believe
Explain the main difference between the pay-as-you-go system employed by Social Security and a private pension plan
What will be an ideal response?
Risk diversification refers to the process by which:
A. people organize themselves in a group to collectively absorb the cost of the risk faced by each individual. B. insurance companies change the risk aversion of their clients. C. risks are shared across many different assets or people, reducing the impact of any particular risk on any one individual. D. insurance companies reallocate the likelihood of catastrophes happening.