Perfectly competitive firms are known for being "price makers."

If the Fed conducts an open market purchase of Treasury bonds, this will

A) encourage banks to make more loans and will increase the money supply. B) encourage banks to make more loans and will decrease the money supply. C) cause banks to reduce their loans and will increase the money supply. D) cause banks to reduce their loans and will decrease the money supply.

We all use the services of speculators as information in reaching our own economic decisions

A) because speculators are aggressive about marketing the information they produce. B) because we all use prices, which are set by bids and offers based on predictions of the future. C) if we buy or sell commodities through an organized exchange. D) if we play the stock market.