Open Market Operations

question 31

Multiple Choice

Open market operations

• A) lack flexibility because only very small purchases or sales may be carried out in any given month.
• B) lack flexibility because open market purchases cannot easily be offset by subsequent open market sales.
• C) are more flexible than other traditional policy tools.
• D) may be carried out only on the third Friday of each month.

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Definitions:

Restrictions on Advertising

Regulations or limitations placed on the content, timing, and medium of advertising to protect consumers and promote fair competition.

Economic Profit

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs.

Monopolistic Competition

A market structure characterized by many firms selling similar but not identical products, with each having some control over its own prices.

Price Makers

Entities in a market that have the power to set prices for goods or services because they hold significant control over the market or the product.