Open market operations are
a. when U.S. treasury bonds are bought or sold in the private market.
b. when the Fed changes the reserve requirement rate.
c. when the Fed buys or sell U.S. treasury bonds.
d. when U.S. treasury bonds are issued by the U.S. government.
c. when the Fed buys or sell U.S. treasury bonds.
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What is a rent ceiling and what are its effects if it is set above the equilibrium rent?
What will be an ideal response?
Cost-reduction generates
a. Increases in long-run profitability b. Increases in long-run profitability only if the cost reduction is difficult to imitate c. Decreases in long run profitability d. No change in profitability
What is core inflation? Why is it used?
What will be an ideal response?
Based on the theory of the expectations-augmented Phillips curve, if the expected inflation rate is 2%, the short-run Phillips curve will
A) have a kink at an inflation rate of 2%. B) be the same as the long-run Phillips curve. C) intersect the long-run Phillips curve at the natural unemployment rate, when the inflation rate is 2%. D) be horizontal at an expected inflation rate of 2%.