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The Open Market Purchase also affects an interest rate. In particular, it immediately affect the Fed Fund Rate

posted by admin in Economics


In this case ( a purchase), it tend to raise or lower rates ??? This interest rate, like all interest rates, has associated with it a borrower and a lender. In this case, who borrows what from whom?
If $100,000,000 is loaned for the typical period that these loans are made for, how much interest (in dollars) goes from the borrower to the lender ?

thank you so much for your help

Which of the following events will increase the domestic real interest rate in an open economy?

posted by admin in Economics


A. An increase in domestic saving
B. A decrease in domestic saving
C. a decrease in the perceived riskiness of investing in the domestic economy
D. an increase in taxes on profits generated by capital
E. a decrease in the government’s budget deficit

When the Fed conducts open market operations to reduce reserves, the fed funds rate: N?

posted by admin in Economics


N. Decreases O. Increases P. Remains the same

iin a small open economy, if the world interest rate is above?

posted by admin in Economics


in a small open economy, if the world interest rate is above the rate at which national savings exceeds domestic investment then there will be a trade_____and____net capital outflow

choices are:
deficit;negative
surplus;positive
deficit;positive
surplus;negative

What action in the open market to take to induce a 3% to 1.75% decrease in the federal funds rate?

posted by admin in Economics


In the fall of 2002 the Fed voted to decrease the federal funds rate target on several different occasions, reducing it from 3% to 1.75%. What action in the “open market” would the Fed’s trader have had to take, other things equal, in order to induce this decrease in the federal funds rate?

33. Which of the following events will increase the domestic real interest rate in an open economy?

posted by admin in Economics


33. Which of the following events will increase the domestic real interest rate in an open economy?

A. an increase in domestic saving .
B. a decrease in the domestic saving.
C. a decrease in the perceived riskiness of investing in the domestic economy.
D. an increase in taxes on profits generated by capital .
E. a decrease in the government’s budget deficit.

34. The primary cause of trade deficits is:

A. production of poor quality goods.
B. unfair trade restrictions.
C. low rates of national saving.
D. high rates of national saving.
E. cheap foreign labor.

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