Which of the Following Is NOT an Accurate Description of Open

question 94

Multiple Choice

Which of the following is NOT an accurate description of open market operations prior to 2008?

• A) It was used to affect the market for bank reserves.
• B) It was used to control the federal funds rate.
• C) It involved buying and selling short-term Treasury securities.
• D) It involved buying and selling long-term securities.

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Definitions:

X-Inefficiency

Occurs when a firm fails to utilize its resources efficiently, due to factors like lack of competitive pressure or managerial inefficiencies.

Homogeneous Product

A product that is considered identical or nearly identical to another product from a different producer.

Pure Competition

A market structure characterized by a large number of small firms, homogeneous products, and free entry and exit.

Pure Monopoly

A market structure characterized by a single seller facing no competition, possessing the power to control prices and market supply.