The main tool that the Federal Reserve uses to conduct monetary policy is
A) discount policy.
B) open market operations.
C) acting as the lender of last resort.
D) check clearing.
E) setting reserve requirements.
B
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If aggregate quantity demanded exceeds aggregate quantity supplied, we can expect an unplanned
A. depletion of inventories, causing firms to raise prices. B. depletion of inventories, causing firms to lower prices. C. accumulation of inventories, causing firms to raise prices. D. accumulation of inventories, causing firms to lower prices.
The depreciation of the dollar will make U.S. goods ________ to foreigners and make imports ________ for U.S. residents.
A. more expensive; more expensive B. cheaper; cheaper C. more expensive; cheaper D. cheaper; more expensive
The Ricardian Equivalence proposition suggests that a tax increase that causes a budget surplus will
A) cause an increase in output. B) cause no change in output. C) cause a reduction in output. D) a reduction in consumption.
Price discrimination exists when
A) a firm charges different buyers different prices for its product but the costs are the same. B) each buyer is treated equally. C) sales are made below cost. D) a firm charges each buyer a price of the product in proportion to its costs.