All of the following are roles of a exchange EXCEPT
A) instituting margin requirements on futures contracts.
B) marking to market at the end of each day.
C) eliminate the need for buyers and sellers of futures contracts to be concerned about the creditworthiness of each other.
D) reducing the default risk involving forward contracts.
D
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In a perfectly competitive market, a permanent decrease in demand initially brings a lower price, economic
A) loss, and entry into the market. B) loss, and exit from the market. C) profit, and entry into the market. D) profit, and exit from the market.
Which of the following statements is true?
A. The Federal Reserve sets the federal funds rate. B. The Federal Reserve sets the target for the federal funds rate, and then uses the reserve ratio to push banks toward that target. C. The Federal Reserve does not set the federal funds rate, but it influences it through the use of its open-market operations. D. The Federal Reserve will set a higher target for the federal funds rate if pursuing an expansionary monetary policy.