The most used tool of the Fed is:
A. open market operations.
B. the reserve requirement.
C. the discount window.
D. These are all used with equal frequency.
A. open market operations.
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The United States economy ______________ operates on its production possibility curve.
A. Always B. Sometimes C. Never
Economists use the term "financial markets" to mean the markets in which
A) households supply their labor services. B) the government borrows to fund any budget surplus. C) firms supply their goods and services. D) firms purchase their physical capital. E) firms get the funds that they use to buy physical capital.
If the equilibrium quantity of a good is also the socially optimal quantity, then:
A. total economic surplus has been maximized. B. the marginal cost to producers of another unit of the good is zero. C. it's possible to make at least one person better off without hurting anyone else. D. the marginal benefit to consumers of another unit of the good is zero.
Generally, if the inflation rate is too high, the Federal Reserve will want to raise the federal funds rate.
Answer the following statement true (T) or false (F)