Describe the channels through which an open market sale of bonds by the Fed affects output in a closed economy
What will be an ideal response?
An open market sale of bonds leads to a leftward shift in the money supply. As a result, interest rates increase, which in turn reduce investment. The lower levels of investment translate into lower output levels.
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Which of the Fed's instruments is most frequently used?
A) Changing reserve requirements B) Open-market operations C) Changing the discount rate D) Changing margin requirements for the stock market
In order to regulate a monopoly's price the government
A) needs to hire former executives from the monopoly. B) should rely on industry experts for information. C) needs accurate information on the monopoly's demand and cost curves. D) needs to know the monopoly's supply curve.
These are the shares of the seven firms in Macland’s sweater industry. Sally’s Sweaters: 26%, Jack’s Sweaters: 12%, Mira’s Sweaters: 2%, Nils’ Sweaters: 8%, Hans’ Sweaters: 3%, Pedro’s Sweaters: 7%, Jules’ Sweaters 2%. What is the four-firm concentration ratio?
a. 60% b. 4% c. 53% d. 48%
A growing number of cigar manufacturers in the Caribbean and Central America have begun producing and exporting cigars to the U.S. market. How has this affected the equilibrium price and quantity of cigars?
What will be an ideal response?