If the federal funds rate rises above the Fed's target range, the Fed should take:
A. an offensive action and sell government bonds.
B. a defensive action and buy government bonds.
C. a defensive action and sell government bonds.
D. an offensive action and buy government bonds.
Answer: B. a defensive action and buy government bonds.
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Which of the following are NOT examples of "convergence"?
A) Japan and Europe B) individual states within the United States C) regions within western Europe D) major nations in Latin America and Western Europe
Autonomous planned spending is a function of the
A) marginal propensity to consume. B) marginal propensity to save. C) interest rate. D) tax rate.
According to the law of diminishing marginal utility:
A. you should never consume more of something if your marginal utility is decreasing. B. if your total utility is increasing as you consume more of something, then your marginal utility must be increasing as well. C. as you consume less of something, your total utility will decrease. D. as you consume less of something, your marginal utility from consuming that good will increase.
For the aggregate supply curve, the profit effect
A. Provides an incentive for producers to decrease output when prices rise. B. Is temporary in the short run, while in the long run it is canceled out because the cost effect dominates. C. Dominates in the long run and causes the curve to be upward-sloping. D. Along with the cost effect causes the curve to be downward-sloping in the long run.