Everything else remaining unchanged, what will happen if the Fed sells government bonds in the open market and borrowed reserves is zero?
A) It will cause both the equilibrium federal funds rate and equilibrium quantity of reserves to fall.
B) It will cause the equilibrium federal funds rate to fall, but no change in the equilibrium quantity of reserves.
C) It will cause the equilibrium federal funds rate to rise, but no change in the equilibrium quantity of reserves.
D) It will cause the equilibrium federal funds rate to rise and the equilibrium quantity of reserves to fall.
D
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When costs that vary with the level of output are divided by the output, you have calculated:
A. total changing cost. B. total fixed cost. C. average fixed cost. D. average variable cost.
The opportunity cost of producing a pair of pants in the USA is 5 bushels of wheat, while in China, it is 2 bushels of wheat. As a result:
a. there can be mutual gains from trade to the two countries if the USA exports wheat to China in exchange for pants b. The USA has a comparative advantage over China in the production of pants. c. China has a comparative advantage over the USA in the production of wheat d. there can be mutual gains from trade to the two countries if the USA exports pants to China in exchange for wheat.