If the Fed Carries Out an Open Market Operation and Sells

question 65

True/False

If the Fed carries out an open market operation and sells U.S. government securities, the federal funds rate falls and the quantity of money increases.

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Definitions:

Production Possibilities

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, technology, etc.).

Trade-offs

Situations where making a decision to gain something entails losing something else, typically requiring a compromise or balancing act.

Technology

The application of scientific knowledge for practical purposes, especially in industry and improvements in tools, machinery, and systems.

Production Possibilities Frontier

The production possibilities frontier (PPF) is a curve depicting all maximum output possibilities for two or more goods, given a set of inputs.