When did the Fed first begin to use open market operations as a policy tool?
A) the 1920s
B) the 1930s
C) the 1960s
D) the 1980s
A
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In 2010 the U.S. government was running a large deficit. Some were concerned that pressures might be put on the Federal Reserve to purchase government bonds to help the government finance this deficit. If the Fed were to buy government bonds to help the government finance its expenditures, then
a. the price level would fall, so the value of money would fall. b. the price level would fall, so the value of money would rise. c. the price level would rise, so the value of money would fall. d. the price level would rise, so the value of money would rise.
If the inflation turns out to be higher than people have expected, then
What will be an ideal response?
As output rises from the shutdown point to the break-even point, the difference between AVC and ATC gets ___________.
Fill in the blank(s) with the appropriate word(s).
The Fed's initial step in pursuing restrictive monetary policy using the federal funds rate is to:
A. announce a higher target. B. sell bonds to banks and the public. C. raise the discount rate. D. raise the prime interest rate.