Which monetary policy tool is the federal reserve using when it buys and sells Securities?

Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter14: Investment, The Capital Market, And The Wealth Of Nations
Section: Chapter Questions
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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?
### 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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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 --- No graphs or diagrams are present in this text.
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