When the Fed raised interest rates between 2004 and 2007, the Federal Reserve:
A. bought U.S. government securities, thereby creating and supplying additional federal funds.
B. encouraged banks to loan out funds to ease their reserve requirements and thus lower the demand for federal funds.
C. sped up the clearing of checks to make more funds available to banks.
D. sold U.S. government securities, thereby contracting the amount of funds available to the federal funds market.
Answer: D
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Which of the following statements is most likely true?
a. In the long term, low or moderate levels of inflation may not pose an overwhelming difficulty for business planning because costs of doing business and sales revenues may rise at similar rates. b. In the short term, high levels of inflation may not pose an overwhelming difficulty for business planning because costs of doing business and sales revenues may rise at similar rates. c. In the long term, high levels of inflation may not pose an overwhelming difficulty for business planning because costs of doing business and sales revenues may rise at similar rates. d. In the short term, low or moderate levels of inflation may not pose an overwhelming difficulty for business planning because costs of doing business and sales revenues may rise at similar rates.
If the U.S. purchases oil from Nigeria, what is the effect in the foreign exchange market?
a. It will increase demand for U.S. dollars. b. It will decrease demand for U.S. dollars. c. It will increase supply of U.S. dollars. d. It will decrease supply of U.S. dollars.
Price floors in agriculture lead to
A. the most efficient market solution. B. more competition in farming. C. surpluses of supported farm products. D. efficient farming techniques being employed.
If the best lawyer in town is also the best at operating a word processor, then according to the theory of comparative advantage, this person should
A) split her time evenly between being a lawyer and a word processor. B) specialize in being a lawyer because its opportunity cost is lower. C) should pursue the activity she enjoys more. D) specialize in being a word processor because it is more capital-intensive.