When the Fed buys U.S. government securities from a bank, the Fed
A) loans the money needed to buy the securities to the bank.
B) increases the bank's reserves at the Fed.
C) obtains the money for the purchase from the U.S. Treasury.
D) decreases the monetary base and raises the federal funds rate.
B
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In the real business cycle model, fluctuations in employment are explained by ________
A) changes in the composition of household assets B) intertemporal substitution as real wages and real interest rates changes C) changes in the marginal propensity to consume D) the impact of a change in price on quantity demand and quantity supplied in goods markets
In short-run equilibrium in a perfectly competitive market,
a. each firm earns an economic profit b. each firm earns a normal profit c. firms shut down if price exceeds average total cost d. each firm takes consumers' marginal utility as given e. peach firm takes the market price as given