An open market purchase of government securities by the Fed will cause which of the following?
A. an excess quantity of reserves supplied and a reduction in the federal funds rate
B. an excess quantity of reserves demanded and an increase in the federal funds rate
C. an excess quantity of reserves demanded and a reduction in the federal funds rate
D. an excess quantity of reserves supplied and an increase in the federal funds rate
Answer: A
You might also like to view...
What mechanism assures that producers use inputs efficiently?
A. Governmental regulations determining the allocation of resources B. Altruism C. The desire for profit D. An innate desire to be efficient E. All of the responses are correct.
Prior to the recession which began in late 2007, the Federal Reserve purchased ________ of the government budget deficit
A) none B) about 50 percent C) a small portion D) all
Which of the following are included in interest income? i. payments made for the use of land ii. income paid to households for loans they make iii. payments made by households for their borrowing
A) i, ii and iii B) ii and iii only C) i and ii only D) ii only E) iii only
According to the benefit principle, the Social Security payroll tax is _____. According the ability-to-pay principle, the Social Security payroll tax is _____
a. equitable; equitable b. equitable; inequitable c. inequitable; equitable d. inequitable; inequitable