If Moderate Deficits Put Upward Pressure on Interest Rates,the Fed

question 75

Multiple Choice

If moderate deficits put upward pressure on interest rates,the Fed may ________ bonds,leading to a ________ in high-powered money.

• A)sell; fall
• B)buy; fall
• C)sell; rise
• D)buy; rise

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Definitions:

Marginal Product Of Labor

The additional output a firm gains from employing one more unit of labor, holding all other inputs constant.

Demand For Labor

The total amount of workers that employers want to hire at a given wage rate and time period.

Opportunity Cost

The loss of potential gain from other alternatives when one option is chosen.

Accounting Profits

The difference between total revenue and explicit costs of a business, calculated using principles of accounting.