If the Fed is increasing its holdings of government bonds at the same time the federal deficit is increasing,
a. the Fed and the Treasury are, as usual, coordinating activities.
b. crowding out is more likely to occur.
c. the debt is being monetized.
d. the Fed is attempting to increase interest rates.
c
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The advantages of a currency union may extend to political relationships, too. How?
A) Currency unions, unfortunately, create political dissension. B) Currency unions can be used by the larger nations to grab political power. C) Currency unions reduce each nation's individual political power. D) Currency unions enhance each nation's identification with other nations in the currency union.
In the market for used cars, if there is asymmetric information yet all cars sell for the same price
A) there is an efficiency problem and there are equity implications. B) there is no efficiency problem, but there are equity implications. C) buyers of lemons win at the expense of buyers of good cars. D) there is no efficiency problem and there are no equity implications.