Which of the following does the federal reserve use most often to combat a recession?
a) selling securities
b) buying securities
c) reducing reserve requirement
d) increasing discount rate
e) increasing federal funds rate
Ans: b) buying securities
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Jill runs a factory that makes lie detectors in Little Rock, Arkansas. This month, Jill's 34 workers produced 680 machines. Jill's average product of labor equaled ________ lie detectors per worker
A) 680 B) 34 C) 23 D) 20 E) None of the above answers is correct.
Which of the following is an example of an automatic stabilizer?
A. Congress legislates lower tax rates to increase consumption and investment. B. Tax rates are increased during a recession to maintain a balanced budget. C. A regressive income tax system reduces tax revenues (as a share of income) as income expands. D. Revenues from the corporate income tax increase sharply during a business boom but decline substantially during a recession, even though no new tax legislation has been enacted.