The law of one price holds exactly only if there are transactions costs associated with buying a product in one location and selling it in another location

If the Fed makes an open market purchase of $1 million of government securities, the monetary base

A) is unchanged in size, though its composition changes. B) will decrease by a multiple of $1 million over time. C) will increase by a multiple of $1 million over time. D) is decreased by $1 million. E) is increased by $1 million.

Which of the following is not a characteristic of a monopoly?

a. the seller has market power b. one seller c. free entry and exit d. a product without close substitutes