If the Fed wants to reduce the inflation rate, it should sell bonds in the open market
a. true
b. false
Answer: a. true
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When new farmers enter the wheat industry, the equilibrium price of wheat
A. always falls. B. falls only if existing firms gang up on the entrant. C. falls only if existing firms are earning no economic profit. D. falls only if the new firm is more efficient than existing firms.
In financial markets, sellers are people who:
A. have cash on hand and are willing to let others use it, for a price. B. want to spend money on something of value right now, but don't have cash on hand. C. want to spend money on something of big value in the future, but don't know how to save for it. D. have cash promised to them at some future date.
Why does an increase in the price level tend to cause the consumption function to shift downward?
a. An increase in the price level decreases disposable income. b. An increase in the price level increases the demand for fixed money assets. c. An increase in the price level decreases the value of fixed money assets. d. An increase in the price level decreases saving and increases debt.
The Beck Depression Inventory-II has a reliability coefficient (coefficient alpha) of .92. Using classical test theory, interpret the meaning of this reliability coefficient.
a. The amount of error variance to observed variance is 92%
b. The amount of true variance to observed variance is 92%
c. The instrument has good enough reliability
d. The instrument's validity coefficient would be .922 (or .92 squared)