If the Fed Buys U

question 92

Multiple Choice

If the Fed buys U.S. Treasury bills and bonds to finance deficits, this means that the government is financing the deficit by

• A) lowering inflation.
• B) raising interest rates.
• C) selling capital.
• D) printing money.

Understand the differing schools of economic thought and their primary advocates.

Comprehend the equation of exchange and its components.

Identify the key concepts central to Keynesian economics, including investment determination.

Recognize the historical context and evolution of economic theories over time.

---

Definitions:

Rivalry

(1) The characteristic of a private good, the consumption of which by one party excludes other parties from obtaining the benefit; (2) the attempt by one firm to gain strategic advantage over another firm to enhance market share or profit.

Excludability

The characteristic of a private good, for which the seller can keep nonbuyers from obtaining the good.

Private Good

A good, or service that is individually consumed and that can be profitably provided by privately owned firms because they can exclude nonpayers from receiving the benefits.

Quantity Demanded

The quantity of a product or service that buyers are prepared and financially able to buy at a certain price.