The Federal Reserve's credit policy refers to
A) the Fed's direct lending to homeowners and students.
B) regulations on terms on credit cards that banks issue.
C) a direct credit on bank depositors' saving and checking accounts.
D) the Fed's direct lending to financial and nonfinancial firms.
D
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When you use a debit card to purchase a pair of jeans, you are
A) creating a 30-day loan from your bank to the seller. B) creating a 30-day loan from the seller to your bank. C) giving your bank an instruction to transfer funds directly from your bank account to the store's bank account. D) creating an overnight repurchase agreement between your bank and the store.
In a perfectly competitive market, the market demand curve is horizontal
a. True b. False
If tax rates are cut, tax revenues may rise, fall, or remain unchanged. What actually happens is considered a(n)
A) theoretical issue. B) corrective issue. C) empirical issue. D) self-regulating issue. E) multiplier issue.
On October 12, 1987, the Dow Jones Industrial Average plunged 508 points, wiping out more than $500 billion in a few hours. How did the Fed respond to this drastic fall in the stock market index?
A) The Fed responded precisely as it did when faced with a similar situation in 1929, that is, it deemed that no action was necessary. B) To encourage the business community to invest in the stock market, the Fed announced that it will sell federal securities to raise the interest rate. C) In an attempt to ward off a recession, the Fed announced that it will provide adequate liquidity, by buying federal securities. D) The Fed provided long-term loans to those corporations that experienced significant decreases in their stock value.