Which of the following actions of the Fed will increase money supply in the U.S. directly?
a. Purchase U.S. government bonds
b. Increase the federal funds rate
c. Increase the reserve requirement
d. Increase the discount rate
e. Ban sales of private mutual funds
a
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A key difference between a Walrasian market and most auction markets is that in most auction markets
A) transactions occur continuously. B) bid prices exceed offer prices. C) only dealers have complete information. D) offer prices exceed bid prices.
The crowding-out effect indicates that budget deficits
a. will stimulate aggregate demand and, therefore, exert a strong impact on output and employment. b. will lead to additional borrowing and higher interest rates that will reduce the level of private spending. c. are highly appropriate when the threat of inflation is present. d. are highly appropriate when the threat of recession is present.
Most businesses advertise their products and services. Some business use SPAM emails to advertise because the cost of a mass e-mail is close to zero. Other business spend millions of dollars to advertise in a 30-second spot during the Super Bowl. Having observed this real world data, economists argue that the amount of money that a business spends on advertising is a proxy for a good or service's
a. size. b. quality. c. newness. d. cost of production.
Which of the following is an infant-industry argument in favor of restrictions on foreign trade?
A. Foreign producers must be stopped from selling their products in this country below cost of production. B. Domestic workers must be protected from the lower wages paid in foreign countries. C. The nation's security demands we ensure an adequate domestic supply capacity of certain products. D. Industries in the early stages of development must be protected from more mature producers.