Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
9) Which monetary policy tool is the federal reserve using when it buys and sells Securities?
10) which of the following best describe government revenue?
11) which of the following is a common criticism of government price controls?
12) which of the following is a general, sustained downward movement of prices for goods and service in an economy?
13) Which of the following regulation control price fixing?
Transcribed Image Text:### Monetary Policy and Government Economic Controls
**9. Which monetary policy tool is the Federal Reserve using when it buys and sells securities?**
- a) Open market operations
- b) The discount rate
- c) Reserve Requirements
- d) Interest on reserves
**10. Which of the following best describes government revenue?**
- a) Government programs designed to improve economic equity
- b) A tax for which high-income earners pay a larger fraction of their income in taxes than low-income earners
- c) Money the government spends to buy goods and services
- d) Income the government receives from taxes and other non-tax sources
**11. Which of the following is a common criticism of government price controls?**
- a) They restrict the free market resulting in a surplus
- b) They inefficiently use taxpayer dollars
- c) They restrict the free market resulting in shortages
- d) They manipulate the market to artificially raise prices
**12. Which of the following is a general, sustained downward movement of prices for goods and services in an economy?**
- a) Inflation
- b) Stimulus
- c) Disinflation
- d) Deflation
**13. Which of the following regulations control price fixing?**
- a) Anti-trust laws
- b) Stimulus bills
- c) Price Controls
- d) Progressive tax reform
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