Open Market Operations Are Defined as

question 15

Multiple Choice

Open market operations are defined as

• A)a bank borrowing from the Fed.
• B)the buying and selling of securities by the Fed.
• C)the buying and selling of securities between banks.
• D)the amount banks can lend on each deposit.
• E)a bank making a loan to the Fed.

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Definitions:

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and firms in a competitive market have no incentive to enter or exit because they are earning normal profit.

Monopolistically Competitive Industry

An industry characterized by many firms offering products that are similar but not perfect substitutes, allowing for some degree of market power.

Monopolistic Competition

A market structure in which many companies sell products that are similar but not identical, allowing for competition among firms.

Demand Curve

A chart that illustrates the correlation between a product's price and the amount consumers want to buy.