Describe the channels through which open market purchases by the Fed affects output in an open economy
What will be an ideal response?
Open market purchases lead to an increase in money supply. As a result, interest rates decrease, which not only leads to increased investment but also depreciates the exchange rate and raises net exports. The higher levels of net exports, in addition to the higher levels of investment, result in higher output levels.
Economics
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If a firm does not produce any output, its
A) total fixed cost must be zero. B) economic profit must be positive. C) total variable cost must be zero. D) total costs must be zero. E) marginal cost must be zero.
Economics
A monopsony is a market structure in which there is a
A) single seller. B) single buyer. C) price floor set by a regulatory agency. D) price ceiling set by a regulatory agency.
Economics