When the Fed fears inflation, the Fed ________ government securities, so that the federal funds rate ________ and the quantity of money ________
A) buys; rises; decreases
B) sells; falls; increases
C) buys; falls; increases
D) sells; falls; decreases
E) sells; rises; decreases
E
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What does the marginal revenue equal when a monopoly's total revenue is maximized? What is the elasticity of demand when the total revenue is maximized?
What will be an ideal response?
If there are barriers to entry into a market, it is possible for the existing firm(s) to earn positive economic profits. All of the following explain this except:
A) new firms cannot enter to take advantage of the profits. B) resource immobility. C) it is possible for a firm in this situation to charge any price it wants and thus preclude anyone else from entering. D) competition does not erode profits the way it would under perfect competition.