The Primary Function of Large Diversified Brokerage Firms in the Money

question 72

Multiple Choice

The primary function of large diversified brokerage firms in the money market is to

• A) sell money market securities to the Federal Reserve for its open market operations.
• B) make a market for money market securities by maintaining an inventory from which to buy or sell.
• C) buy money market securities from corporations that need liquidity.
• D) buy T-bills from the U.S. Treasury Department.

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Definitions:

Supply And Demand Graph

A visual representation used in economics to show the relationship between the supply of products and the demand for them.

Public Good

A product or service that is non-excludable and non-rivalrous, meaning it can be used by anyone without diminishing its availability to others.

Allocative Efficiency

The apportionment of resources among firms and industries to obtain the production of the products most wanted by society (consumers); the output of each product at which its marginal cost and marginal benefit are equal, and at which the sum of consumer surplus and producer surplus is maximized.

Marginal Costs

The additional cost incurred by producing one more unit of a good or service, crucial for making production and pricing decisions.