Which of the following statements is most correct?
A. The discount rate is the primary policy tool of the FOMC.
B. The difference between the target and actual federal funds rate is the dealer's spread.
C. The FOMC sets the target federal funds rate range.
D. The FOMC sets the federal funds rate.
Answer: C
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Julie is in the 28 percent tax bracket. She earns an 8 percent rate of return after taxes on a tax-free municipal bond. What will the after-tax rate of return be on a taxable bond (with equal risk)?
a. 36 percent b. 28 percent c. 14 percent d. 8 percent
Suppose Tyler values a basketball at $20 . Jacqui values a basketball at $25 . The pre-tax price of a basketball $10 . The government imposes a tax of $5 on each basketball, and the price rises to $15 . The deadweight loss from the tax is
a. $25. b. $15. c. $10. d. $0.
A tax on primary resource use would
a. Increase recycling rates and raise the costs of some products b. Increase recycling rates and not affect product costs c. Decrease recycling rates and raise the cost of some products d. Decrease recycling rates and not affect product costs e. Decrease recycling rates but the effect on prices is unknown
Standard and Poor’s gave mortgage-backed securities a ______ rating.
a. AAA b. BBB c. C d. D