Open market operations are the principal mechanism for directly altering the reserves of the banking system.
Answer the following statement true (T) or false (F)
True
Open market operations are the most powerful and the most frequently used tool of the Fed.
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Because of the monopoly power that comes with being the only firm to produce a product, it is always more efficient to have multiple firms in an industry.
Answer the following statement true (T) or false (F)
If a monopolist sets a low price to discourage potential competitors from entering the market, it is referred as
A) price skimming. B) predatory pricing. C) penetration pricing. D) limit pricing.
People are likely to want to hold more money if the interest rate
a. increases making the opportunity cost of holding money rise. b. increases making the opportunity cost of holding money fall. c. decreases making the opportunity cost of holding money rise. d. decreases making the opportunity cost of holding money fall.
Which statement is true?
A. President Eisenhower did not attempt to undo the legacies of the New Deal, such as Social Security and unemployment insurance. B. There was a major tax increase in 1964. C. A war in Vietnam and a "war on poverty" in the Johnson Administration helped to reduce the federal budget deficit. D. None of the choices are true.