Targeted asset purchases are:
A. statements today about policy targets in the future.
B. asset purchases that increase the reserves held by the federal government.
C. expansion of the supply of aggregate reserves beyond the amount needed to maintain the policy rate target.
D. asset purchases that shift the composition of the Fed's balance sheet.
Answer: D
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Refer to Figure 18-1. The French fall in love with California wines and triple their purchases of this beverage. Assuming all else remains constant, this would be represented as a movement from
A) B to C. B) C to D. C) A to B. D) A to D. E) B to A.
The international organization that serves as a forum for trade discussions and the development of trade rules is called
A) the WTO. B) the World Bank. C) the IMF. D) Bretton Woods. E) the United Nations.
Mr. Max is about to purchase 4 units of good A and 6 units of good B. The price of both A and B is $2 . Mr. Max has only $20 to spend. If the marginal utility of the fourth unit of A is 12 and the marginal utility of the sixth unit of B is 12, then:
a. he should not buy anything. b. he should buy more of A and less of B. c. he should buy less of A and more of B. d. he should buy A and B in the quantities indicated. e. he should buy more of A and little more than that of B.
The long-run supply curve of a perfectly competitive market is a:
a. an upward rising step function. b. a downward sloping step function. c. a vertical line at the market price. d. a horizontal line at the market price.