An open-market ________ of securities by the Fed results in a decrease in reserves and a decrease in the ________ money.
A. sale; supply of
B. purchase; supply of
C. sale; demand for
D. purchase; demand for
Answer: A
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The most frequently used tool of U.S. monetary policy is
a. the discount rate. b. the reserve requirement. c. open-market operations. d. moral suasion.
Brock is willing to pay $400 for a new suit, but he is able to buy the suit for $250 . His consumer surplus is
a. $650. b. $150. c. $250. d. $400.
What will a home monopolist prefer?
a. high quotas b. low quotas c. low tariffs d. It would like all of these equally; that is, they are equivalent.
Which of the following will not shift the aggregate demand curve to the left?
A. Consumers become more optimistic about the future. B. Government spending decreases. C. Business optimism decreases. D. Consumers become pessimistic about the future.