When the Federal Reserve conducts open market transactions, it
A) buys or sells corporate bonds in the bond market.
B) issues government bonds to raise funds for the government.
C) makes credit available to financial institutions in crises
D) buys or sells previously issued government bonds.
Ans: D) buys or sells previously issued government bonds.
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A marginally attached worker is
A) a person who is not happy with his or her job. B) someone who works part-time more than 25 hours per week but wants full-time work. C) someone who does not have a job but is available and willing to work and has made specific but unsuccessful efforts to find a job during the past 4 weeks. D) someone who does not have a job but is available and willing to work but has not made specific efforts to find a job during the past 4 weeks. E) another name for an unemployed worker.
When they are confronted with an adverse shock to aggregate supply, policymakers face a difficult choice in that
a. if they contract aggregate demand, the unemployment rate will increase further. b. if they expand aggregate demand, the inflation rate will increase further. c. they face a less favorable trade-off between inflation and unemployment than they did before the shock. d. All of the above are correct.