When a recession occurs, we would expect the government to run a budget deficit by raising the level of its spending or by cutting taxes, or perhaps both. The Fed would be expected to
a. reduce the legal reserve requirement, increase the discount rate, and buy securities on the open market
b. reduce the legal reserve requirement, reduce the discount rate, and sell securities on the open market
c. reduce the legal reserve requirement, reduce the discount rate, and buy securities on the open market
d. increase the legal reserve requirement, reduce the discount rate, and sell securities on the open market
e. increase the legal reserve requirement, increase the discount rate, and sell securities on the open market
C
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What is the value of the index of intra-industry trade for an industry in which exports are $100 million and imports are $200 million?
a. 100/300 = 0.33 b. (100 + 200)/100 = 3.00 c. 100/[1/2 × (100 + 200)] = 0.67 d. 100/200 = 0.50
In a PPF graph of goods X and Y, points that lie beyond (to the right of) the PPF represent combinations of the two goods that are currently unattainable
Indicate whether the statement is true or false