Open market transactions involve which of the following activities?
I. issuing new Federal Reserve notes
II. buying or selling newly issued government bonds to raise funds for the government
III. buying or selling previously issued government bonds to change the volume of bank reserve
A) I only
B) II only
C) III only
D) II and III only .
E) I, II ,and III
Ans: C) III only
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A bank can lower its leverage risk by
A) issuing more stock. B) buying more securities and making fewer loans. C) more closely matching the average maturity of its assets and liabilities. D) taking in fewer deposits and relying more in miscellaneous liabilities to raise funds.
When costs spill over to third parties, there is a(n)
A) cost overrun. B) excessive competition. C) negative externality. D) government subsidy.
Changing the units of measurement, e.g. measuring testscores in 100s, will do all of the following EXCEPT for changing the
A) residuals B) numerical value of the slope estimate C) interpretation of the effect that a change in X has on the change in Y D) numerical value of the intercept
Refer to the above figure. For which Lorenz curve does the richest 40 percent make 50 percent of the nation's money income?
A) A B) B C) C D) D