Open Market Operations Involve the

question 168

Multiple Choice

Open market operations involve the

• A) purchase or sale of bonds by a central bank.
• B) Federal Reserve dictating the discount rate to influence the money supply.
• C) purchase of securities from the U.S.Treasury.
• D) loaning of deposits between private banks.
• E) sale of Federal Reserve notes.

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Definitions:

Giffen Good

A type of inferior good for which demand increases as its price increases, contrary to the typical law of demand.

Slutsky Substitution Effect

A concept in economics that describes how a change in the price of a good affects consumption patterns, separating the effect into income and substitution effects.

Indifference Curve

A graph that shows different combinations of two goods among which a consumer is indifferent, implying the same level of utility for each combination.

Hicks Version

Refers to John Hicks' adaptation of consumer demand theory, particularly in relation to indifference curves and utility maximization.