The Fed can decrease the federal funds rate by
A. Simply announcing a lower rate because the Fed has direct control of this interest rate.
B. Selling government bonds.
C. Buying government bonds, which causes market interest rates to fall.
D. Changing the money multiplier.
Answer: C
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In practice, monopolistically competitive markets are:
A. very rare. B. very common. C. virtually nonexistent. D. the only type of market that truly exists.
Fixing exchange rates reduces
a. the demand for currency b. the quantity demanded of currency c. the supply of currency d. the quantity supplied of currency e. uncertainty associated with international trade
The use of abstraction in economic analysis is one of its primary weaknesses.
Answer the following statement true (T) or false (F)
Suppose a country has been running a persistent government budget deficit. If the deficit is reduced, but remains positive...
What will be an ideal response?