The Use of Open-Market Operations as a Monetary Tool Has

question 27

Multiple Choice

The use of open-market operations as a monetary tool has the advantage that:

• A) they can be implemented rapidly, without administrative delays.
• B) they are flexible and precise.
• C) they can be easily reversed if errors are made.
• D) all of the given answers are correct.

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Definitions:

Negative Externality

A cost that affects a party who did not choose to incur it, often associated with the consumption or production of goods and services.

Price

The sum required, expected, or disbursed as a purchase price for an item.

Government-Provided Goods

Goods and services offered to the public by the government that might not be provided by the market or would be underprovided, such as public parks and national defense.

Explicit Fee

A clear and defined charge for a service or product that is not hidden or implicit.