The Fed accidentally discovered open market operations when
A) it came to the rescue of failing banks in the early 1930s, and found that its purchases of bank loans injected reserves into the banking system.
B) it purchased securities for income following the 1920-1921 recession.
C) it attempted to slow inflation in 1919 by selling securities and found that its sales drained reserves from the banking system.
D) it reinterpreted a key provision of the Federal Reserve Act.
B
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Refer to the scenario above. What is Alice's optimal bidding price?
A) $25,000 B) $30,000 C) $24,000 D) $36,000
The invisible hand principle indicates that when individuals are directed by prices determined in competitive markets, their actions will tend to promote the efficient use of resources
A) even when each market participant cares only about their own self interest rather than the overall efficiency of resource use. B) even if business firms fail to produce goods efficiently. C) only if buyers and sellers personally care about economic efficiency. D) if, and only if, businesses recognize their social obligation to keep costs low and use resources wisely.
A graph showing ________ is an isoquant.
A. all combinations of products that yield the same total utility B. all combinations of capital and labor that have the same total cost C. all combinations of products desired by consumers D. all combinations of capital and labor that a firm can use to produce a given amount of output
The enacted Gramm-Rudman-Hollings Act would tend to have an
A. automatic stabilizing impact upon the economy. B. overall positive impact upon the economy during any stage of a business cycle. C. automatic destabilizing impact upon the economy. D. overall neutral impact upon the economy.