To lower long-term interest rates, in 2010 the Fed started its new open market operation program to purchase
A) mortgage-backed securities.
B) commercial papers.
C) long-term Treasuries.
D) Treasury bills and Treasury notes.
C
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Refer to Figure 12-6. Jason is currently producing 20 thousand pounds of apples. To maximize his profit Jason should
A) keep production at 20 thousand pounds. B) increase production to the output rate indicated by point d. C) decrease production to the output rate indicated by point a. D) increase production to the output rate indicated by point e.
Figure 11-6
At its optimal output level, the profit-maximizing monopolist in Figure 11-6 will earn a profit equal to
A. zero. B. (P2? P3)Q. C. P > Q. D. (P5? P6 )Q.
An example of a positive externality is
a. pollution because it affects people not directly involved with producing it b. a homeowner's maintenance of a beautiful lawn because this creates a benefit for neighbors c. creating a monopoly d. driving a car that emits pollution e. cigarette smoking because this imposes an indirect cost on people around the smoker
Which of the following is true?
a. Monetary policy influences long-term real interest rates more than short-term interest rates. b. Short-term interest rates are primarily determined by real factors and the expected inflation. c. A shift to a more expansionary monetary policy will tend to raise short-term interest rates. d. A shift to expansionary monetary policy that increases the fear of future inflation will tend to increase long-term interest rates.