When the Fed sells bonds, the:
A. discount rate increases.
B. discount rate decreases.
C. federal funds rate increases.
D. reserve requirement falls.
Answer: C
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"Government failure" exists when political decision-makers choose actions that
a. seek efficient outcomes rather than fair outcomes. b. seek fair outcomes rather than efficient outcomes. c. conflict with efficient allocation of resources. d. conflict with the outcome favored by the majority of voters.
Economists use the term ______ to refer to a situation in which the market on its own fails to produce an efficient allocation of resources
Fill in the blank(s) with correct word
Which of the following is not included in gross private domestic investment spending?
A) Household spending on residential construction. B) Spending on business inventories. C) Household spending on durable goods. D) Business spending on plant and equipment.
If a firm can earn a profit stream of $50,000 per year for 10 years, that profit stream is worth
A) more than $500,000 today. B) $500,000 today. C) less than $500,000 today, but a positive amount. D) nothing today E) some amount, but whether it is more, less or the same as $500,000 cannot be determined.