If you were a professor of economics explaining to your class the three primary tools of monetary policy used by the Fed, you would write on the chalk board
a. changes in the legal reserve requirement, changes in the discount rate, and changes in tax rates
b. changes in the legal reserve requirement, changes in tax rates, and open market operations
c. changes in tax rates, changes in the discount rate, and open market operations
d. changes in the legal reserve requirement, open market operations, and moral suasion
e. changes in the legal reserve requirement, changes in the discount rate, and open market operations
E
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The opportunity cost of holding money is measured by:
A) short-term nominal interest rate B) short-term real interest rate C) long-term nominal interest rate D) long-term real interest rate
In the above figure, which of the following statements is FALSE if the firm is operating at output level Q2?
A) The output is equivalent to an unregulated monopolist. B) Economic profits are positive. C) The price is lower than at an equivalent firm forced by regulators to charge ATC pricing. D) Average costs would be lowered by expanding output.
Most economists have argued that the persistence of high unemployment despite New Deal policies:
a. constitutes a complete repudiation of New Deal policies. b. was the result of "sticky" wages. c. was in part the result of pressures from government to maintain wages. d. Both b and c are correct.
Which of the following would move the economy down and to the right along a short run Phillips Curve? a. Increases in the required reserve ratio by the Fed
b. Increases in taxes by the federal government. c. Increases in the interest rate that the Fed pays on bank reserves. d. All of the above.