Rather Than Using the Purchase and Sale of Only Government

question 17

Multiple Choice

Rather than using the purchase and sale of only government bonds in the conduct of open market operations,in 2008 the Fed also began buying and selling

• A)stock options so it would be able to gain from the expected rebound in the stock market.
• B)real estate in the Washington D.C.area.
• C)corporate bonds,commercial paper,and mortgage-backed securities from commercial banks and other financial institutions.
• D)future contracts for goods like grains,metals,and crude oil,which could be expected to increase in price substantially if the inflation rate rose rapidly in the future.

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Definitions:

Production Possibilities Frontier

A curve depicting the maximum viable combination of two products that can be produced in an economy, assuming all resources are fully and efficiently utilized.

Economize

To reduce expenses or to use resources carefully and efficiently to reduce waste and save money.

Full Production

The level of production where a company uses all its resources efficiently.

Unemployment Rate

The part of the labor force that is without employment but is actively interested in finding a job.