If the FOMC orders a purchase of government securities from member banks, where does the FOMC get the money to pay for the securities?
a. It creates money to pay for the securities by adding the purchase amount to the banks' reserves.
b. It pays for the securities with new Federal Reserve notes.
c. It borrows the necessary funds from the Treasury.
d. It auctions off part of the securities it already owns.
a
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Suppose the CPI for this year is 133.7. This number means that
A) on average, goods cost $133.70 each this year. B) prices rose 33.7 percent over the last year. C) prices rose 133.7 percent over the base year. D) prices rose 33.7 percent over the base year. E) prices rose 133.7 percent over the last year.
Some states require that unions represent non-union workers who don't pay dues in their collective bargaining negotiations
Explain using economic logic how this might result in fewer unions than would otherwise be the case if these types of laws did not exist.
Which of the following describes the substitution effect of a price change?
A) The change in quantity demanded of a good that results from the change in the price of a substitute for the good. B) The change in demand that results from a change in price, making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power. C) The change in quantity demanded of a good that results from the effect of a change in price on consumer purchasing power, holding everything else constant. D) The change in quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power.
Individuals who are more risk averse
a. buy less insurance b. buy more insurance c. are not more or less inclined to buy insurance d. are philosophically opposed to insurance