Here is how an open market sale works: A commercial bank __________ government securities to (from) the Fed, which lowers the bank's deposits at the __________ and __________ the bank's __________
A) buys; Fed; lowers; reserves
B) sells; Treasury; raises; reserves
C) sells; Fed; raises; reserves
D) buys; Treasury; lowers; liabilities
E) none of the above
A
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
The opportunity cost of an activity means the:
A. amount of money the activity costs. B. expected gains minus the expected costs of engaging in the activity. C. expected gains by engaging in the activity. D. the value of the best alternative that must be sacrificed in order to engage in the activity.
Why is a monopolist's marginal revenue less than the price?
What will be an ideal response?
If a union sets the wage rate to maximize the total wage receipts of its members, the price elasticity of demand for labor would be
A) zero. B) numerically equal to 1. C) finite, but greater than -1. D) positive, but less than 1.