To increase the federal funds rate, the Fed can:
A. buy government bonds from the public.
B. decrease the discount rate.
C. decrease the prime interest rate.
D. sell government bonds to commercial banks.
D. sell government bonds to commercial banks.
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One of the influences that the world economy has on U.S. aggregate demand comes from changes in
A) foreign income. B) world opinion. C) foreign aid. D) world pollution. E) foreign governments.
A flat wage profile refers to
A) wage compression. B) backloaded compensation. C) an efficiency wage. D) deferred compensation.
In a market economy, who makes the decisions that guide most economic activity?
a. firms only b. households only c. firms and households d. government
Suppose real estate prices rise by 40 percent in a four-year period, while goods and services rise in price by 8 percent in the same time period. Population, the stock of houses, and other variables important to real estate prices have remained almost constant. Which of the following is most likely?
A. GDP has increased by about 40 percent over the four-year period. B. Nominal wealth has declined. C. Real wealth has increased. D. Asset inflation has occurred.