If the Fed Sells Government Securities, in the Short Run

question 92

Multiple Choice

If the Fed sells government securities, in the short run the nominal interest rate_{--------------------} and the real interest rate_{--------------------}.

• A)does not change; rises
• B)rises; does not change
• C)rises; falls
• D)rises; rises
• E)falls; falls

---

Definitions:

Tragedy of the Commons

A concept illustrating how individual users acting independently according to their own self-interest can ultimately deplete or spoil a shared limited resource, despite it being in no one's long term interest.

Social Trap

Situations where individuals or groups engage in behaviors that are beneficial in the short term but detrimental in the long term, often leading to collective negative outcomes.

Simulation Game

A video game or computer game that replicates real-life activities, systems, or environments for training, research, or entertainment purposes.

Competitive Choice

The concept involves selecting alternatives based on a competitive framework where the best option is chosen through comparison and evaluation against others.