The purchase and sale of government securities by the Fed is called ________.

A. money market transactions
B. federal funds market
C. open market operations
D. term auction facility

Answer: C

Economics

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A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would increase the probability of a sale from 20% to 70% but would cost him $5 . If the average price of shoes is $100, what is the minimum commission rate would induce him to work hard?

a. 4% b. 6% c. 8% d. 10%

Economics