Suppose on any given day there is an excess supply of reserves in the federal funds market
If the Federal Reserve wishes to keep the federal funds rate at its current level, then the appropriate action for the Federal Reserve to take is a ________ open market ________, everything else held constant. A) defensive; sale
B) defensive; purchase
C) dynamic; sale
D) dynamic; purchase
A
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When a tax is imposed on a good, at the after-tax equilibrium the marginal benefit of the last unit produced ________ the marginal cost
A) equals B) is greater than C) is less than D) can be calculated but is not comparable to E) The premise of the question is incorrect because after a tax is imposed, it becomes impossible to determine the marginal benefit and the marginal cost.
The Cambridge k is all of the following except
A) the reciprocal of the income velocity of money. B) a transactions demand for money. C) the fraction of GDP that people wish to hold in the form of money balances. D) the velocity of money.