Econ 3

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Free trade based on comparative advantage is economically beneficial because:

-it promotes an efficient allocation of world resources -it increases competition -it provides consumers with a wider range of products

The fact that international trade specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that

A nations trading possibilities line lies to the right of its production possibilities line

The federal reserve requires who to deposit all reserves in the federal reserve bank

All depository institution

Which of the following can result in production efficiencies among nations producing a particular good

All of the above

How do banks increase their actual cash reserves on hand

Borrow from the federal reserve

How do commercial banks increase their lending ability

Borrow from the federal reserve bank

Which of the following is a labor intensive commodity

Cameras

Which of the following is not a tool of monetary policy

Changes in tax rates

The FOMC changes money supply by

Changing the discount rate changing the reserve ratio and buying or selling securities

If the FED sells bonds to the public what happens to commercial banks

Decrease the banks reserves

I'm recent years the untied states has

Exported more services than imported

Who is in control of the US monetary policy

Federal open market committee in the federal reserve

What happened when the FED purchased government securities from the United States citizens

Increase amount of money in circulation

What is the discount rate

Interest rate changed by the federal reserve to commercial banks

How to commercial banks increase their reserves

Purchase of bonds in the federal reserve open market

What are open market operations

Purchases or sales of government securities by the FED

What happens when federal reserve banks bit government securities from commercial banks

The banks checkable deposits are unchanged but their reserves increase

What is monetary policy used for

To change the money supply of the United States

What are securities that are bought and sold in open market operations

Treasury bills and bonds

In comparing monetarism and rational expectations theory we find that

both favor policy rules, but for different reasons.


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