If the Fed engages in quantitative easing, it has likely
A) started paying interest on required reserves.
B) increased the federal funds rate by selling private securities.
C) increased the discount rate to prevent inflation.
D) decreased the discount rate by selling its own securities.
E) decreased the federal funds rate to almost zero by buying large sums of securities.
E
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A tax
A) places a wedge between the price paid by the buyers and the price received by the sellers. B) reduces consumer surplus and producer surplus. C) decreases government spending. D) Both answers A and B are correct. E) None of the above answers is correct.
Which of the following is true when a Nash equilibrium is reached in a duopoly with homogeneous products?
A) Both the firms earn positive economic profits. B) Each firm charges a price equal to its average fixed cost. C) Both the firms earn zero economic profits. D) Both firms incur huge losses.
In the desire to have a celebrity's image protected to prevent it from being used in ways he would not approve, a celebrity's estate
A) will probably not be successful, since there are no laws regulating this kind of use in the United States. B) will most likely be more successful in developing countries than in high-income countries, since property regulations are better enforced in developing countries. C) can rely on U.S. laws that protect intellectual property rights to prevent the unauthorized use of his image. D) will have to be granted a patent declaring the celebrity's image a new product, and this will give the estate protection for 7 years.
The real interest rate for investments reflects not only the short-term real interest rate set by the central bank, but also the financial frictions
When the policy rate has hit the floor of zero, to stimulate the economy at given inflation rates, policymakers can A) lower the financial frictions. B) lower the short-term real interest rate. C) lower both the short-term real interest rate and the financial frictions. D) lower the policy rate.