Who buys and sells in the Fed funds market?
A. Financial institutions and large corporations
B. Anyone with a computer and an Internet connection can participate
C. Only commercial banks and depository institutions
D. All large financial institutions
Answer: C
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A characteristic of a public good is
A) rival consumption. B) the exclusion principle. C) the free-rider problem. D) clear property rights.
If the cross-price elasticity of demand between two goods is -2.2, then the
a. two goods are substitutes b. two goods are complements c. income elasticity of demand must be between 0 and 1.0 d. goods are both normal goods e. goods are both inferior goods
A competitive firm's profit-maximizing sales quantity ______ when the market price increases.
A. cannot decrease B. cannot increase C. may increase or decrease D. will always decrease
Which of the following would not be a policy option to eliminate an AD shortfall?
A. Reduce transfer payments. B. Increase transfer payments. C. Increase government purchases. D. Reduce taxes.