When the Fed wants to tighten monetary policy, the staff of the Fed is likely to:
A. purchase U.S. Treasury Securities.
B. increase discount loans.
C. increases IOER.
D. sell U.S. Treasury Securities.
Answer: C
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After a price floor of $23 is placed on the market in the graph shown, which area represents consumer surplus?
A. A
B. A + B
C. A + B + C
D. A + B + C + D
Developing countries do:
A. compete with one another for foreign investment, and this competition reduces the benefits from foreign investment. B. not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs. C. not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place. D. compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.
Recall the Application about the decrease in price of illegal drugs in the United States to answer the following question(s).Recall the Application. If the decrease in price of illegal drugs is primarily due to a change in supply, the equilibrium quantity of drugs:
A. will increase. B. will decrease. C. will not change. D. may or may not change.
Foreign exchange risk is
A. an exchange rate arrangement in which a country pegs the value of its currency to the exchange value. B. the possibility that changes in the value of a nation's currency will result in variations in the market value of assets. C. a financial strategy that reduces the change of suffering losses arising from foreign exchange risk. D. active management of a floating exchange rate on the part of a country's government.