When the Federal Reserve Sells Assets from Its Portfolio to the Public

question 41

Multiple Choice

When the Federal Reserve sells assets from its portfolio to the public with the intent of changing the money supply,

• A)those assets are government bonds and the Fed's reason for selling them is to increase the money supply.
• B)those assets are government bonds and the Fed's reason for selling them is to decrease the money supply.
• C)those assets are items that are included in M2 and the Fed's reason for selling them is to increase the money supply.
• D)those assets are items that are included in M2 and the Fed's reason for selling them is to decrease the money supply.

Distinguish between consumer surplus and producer surplus.

Evaluate the role of efficiency and equity in economic policies.

Calculate total, consumer, and producer surplus from given market scenarios.

Understand the effects of price controls on market surplus.

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