In the Short-Run Macro Model,an Open-Market Purchase of Bonds by the Fed

question 173

Multiple Choice

In the short-run macro model,an open-market purchase of bonds by the Fed will

• A) raise the interest rate,reduce spending,and increase output
• B) raise the interest rate,reduce spending,and decrease output
• C) lower the interest rate,reduce spending,and decrease output
• D) lower the interest rate,increase spending,and decrease output
• E) lower the interest rate,increase spending,and increase output

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Definitions:

Expense Equation

A formula used to calculate the total expenses by adding various costs and expenses associated with operating a business or managing personal finances.

Markup

The amount added to the cost price of goods to cover overhead and profit.

Wholesale Price

The cost at which goods are sold to retailers by the manufacturers or distributors, which is typically lower than the retail price.

Revenue

Revenue is the total amount of money received by a company for goods sold or services provided during a certain period of time.