The most important tool of monetary policy is ________, through which the Fed affects the variable ________ in the money-creation formula
A) open market operations, e
B) open market operations, H
C) rediscount policy, e
D) rediscount policy, c
E) reserve requirement policy, e
B
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If people increase their expected rate of interest, the speculative demand for money curve will _____ and money supply will _____
a. shift downward, remain unchanged. b. shift upward; remain unchanged. c. not be affected; shifts upward. d. not be affected; not be affected.
In a perfectly competitive market, all of the following are true EXCEPT:
A. firms take prices as given. B. firms produce the quantity for which marginal cost equals price. C. firms can increase profits by charging a price higher than the market price. D. buyers take prices as given.
A monopolist might keep the prices below the profit maximizing level:
a. to attract new firms to the market. b. to increase producer surplus. c. due to government intervention and scrutiny. d. due to economies of scale.
What is the MOST likely reason neighboring nations engage in trade?
a. labor availability b. similar tastes and preferences c. proximity d. shared membership in a free trade area