When the Fed conducts open market operations, the impact of the buying or selling of bonds will include changes in
A) the money supply.
B) interest rates.
C) the expected rate of inflation.
D) a and c
E) a, b and c
E
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A production possibilities frontier has a downward slope because
A. increased production of one good always reduces the additional profit of production. B. decreased production of one good is associated with lower profit from that good. C. economists have a negative view of life and human nature. D. increased production of one good always reduces production of the other. E. increased production of one good necessarily causes production of other goods to increase.
Free riding is not a problem in the market for a private good because
A) people who do not pay for the good can be excluded from consumption. B) the good is a rival good. C) the market eliminates the problem of externalities. D) The question errs because free riding is a problem in providing private goods.
Keynes argued that the precautionary component of the demand for money was primarily determined by the level of people's ________, which he believed were proportional to ________
A) incomes; wealth B) incomes; age C) transactions; income D) transactions; age
National income differs from net national product because
a. it includes profits of corporations. b. of a statistical discrepancy. c. it includes transfer payments. d. it excludes depreciation.