When the Federal Reserve Fights Inflation Via Open Market Operations

question 39

Multiple Choice

When the Federal Reserve fights inflation via open market operations, the supply of loanable funds curve shifts ________ and the aggregate demand curve shifts ________.

• A) leftward; leftward
• B) leftward; rightward
• C) rightward; leftward
• D) rightward; rightward

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Definitions:

Economic Profits

The difference between total revenues and total costs, including both explicit and implicit costs, representing profits exceeding the opportunity costs of all resources used by a firm.

Accounting Profits

The net income of a company as calculated by subtracting total expenses from total revenues, in accordance with accounting principles.

Negative

A term used to describe values or balances that are less than zero, often used in financial contexts.

Accounting Profit

The difference between total revenue and total expenses when both are measured in accordance with generally accepted accounting principles.