The Fed's most important and most frequently used tool of monetary policy is
A) moral suasion.
B) open-market operations.
C) changes in the discount rate.
D) changes in required reserve ratios.
Ans: B) open-market operations.
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Two university graduates, Bill and Steve, worked for an advertising agency at an annual salary of $40,000 each for 3 years after they graduated. Then, they decided to quit their jobs and start a partnership that designs and builds Web sites
They rented an office for $12,000 a year and bought capital for $30,000. To pay for the equipment, Bill and Steve borrowed money from a bank at an annual interest rate of 6 percent. During their first year of operation, the partners' total revenue was $100,000. The market value of their capital at the end of the year was $20,000. If Bill and Steve do not design Web pages, their best alternatives are to return to their previous job. a) What is the firm's economic depreciation? b) What are the partnership's costs? c) What is the firm's economic profit in the first year of operation?
Which of the following statements regarding a competitive market is not correct?
a. There are many buyers and many sellers in the market. b. Because of firm location or product differences, some firms can charge a higher price than other firms and still maintain their sales volume. c. Price and average revenue are equal. d. Price and marginal revenue are equal.
The figure below presents information for a one-shot game.Firm AFirm B??Low PriceHigh Price?Low Price(2,2)(10,-8)?High Price(-8,10)(6,6)What are secure strategies for firm A and firm B respectively?
A. (high price, low price) B. (high price, high price) C. (low price, low price) D. (low price, high price)
Mason and Chloe each produce two goods. According to the principle of comparative advantage, the total output produced by these individuals will be greatest
A) if Chloe produces both goods and Mason produces nothing. B) if each good is produced by the individual who has the lower opportunity cost of producing that good. C) if each good is produced by the individual who has the higher absolute cost of producing that good. D) if Mason produces both goods and Chloe produces nothing.