The major problem facing the economy is high unemployment and weak economic growth. The inflation rate is low and stable. Therefore, the Federal Reserve decides to pursue a policy to increase the rate of economic growth. Which policy changes by the Fed would tend to offset each other in trying to achieve that objective?
A. Selling government securities and raising the discount rate.
B. Buying government securities and raising the discount rate.
C. Buying government securities and lowering the reserve requirement.
D. Selling government securities and raising the reserve requirement.
Answer: B
You might also like to view...
A situation in which a benefit or a cost associated with an economic activity spills over to third parties is called
A) a public good. B) a merit good. C) an externality. D) the free-rider problem.
Suppose Toor's beer is sold in a monopolistically competitive market. If the price of Toor's is currently $2 and the average cost of producing Toor's is $1, in the long run we can expect:
A. the demand for Toor's beer to increase. B. the price of Toor's beer to decrease, and the average cost of producing Toor's to increase. C. the demand curve for Toor's beer to become horizontal. D. no change in the price or average cost of producing Toor's beer.
How do monopoly prices and quantities produced differ from perfectly competitive outcomes, all other things equal?
A. Monopoly prices and quantities are both lower than competitive outcomes. B. Monopoly prices and quantities are both higher than competitive outcomes. C. Monopoly prices are lower than competitive prices but monopoly quantities are higher than competitive quantities. D. Monopoly prices are higher than competitive prices but monopoly quantities are lower than competitive quantities.
The largest trading partner of the U.S. in 2012 was:
A. China B. Japan C. Mexico D. Canada