The term open market operations refer to:
The buying and selling of government securities by the central bank to influence the money supply
The buying and selling of goods and services in international markets
The buying and selling of stocks in the stock market
The buying and selling of consumer goods in a free market economy
Correct Answer :
A. The buying and selling of government securities by the central bank to influence the money supply
Related Questions
The term trade surplus occurs when:
Exports exceed imports
Imports exceed exports
Both exports and imports are equal
Both exports and imports are zero
The Phillips curve depicts the relationship between:
Inflation and unemployment
Government spending and taxes
Savings and investment
Consumption and income
The term long-run Phillips curve suggests that there is a trade-off between:
Inflation and unemployment in the long run
Inflation and output in the short run
Government spending and taxes
Monetary policy and fiscal policy
If the government implements a policy of increasing the money supply to stimulate economic activity, it is employing:
Expansionary monetary policy
Contractionary monetary policy
Expansionary fiscal policy
Contractionary fiscal policy
The term marginal revenue refers to:
The additional revenue earned from producing one more unit of a good or service
The total revenue earned by a firm
The total cost of producing a given quantity of a good or service
The additional cost of producing one more unit of a good or service
The term opportunity cost refers to:
The value of the next best alternative that must be forgone when a decision is made to allocate resources to a particular use
The total cost incurred in producing a good or service
The cost incurred when a firm decides to shut down operations
The cost of goods and services in an open economy
The term money multiplier refers to:
The ratio of the change in the money supply to the change in the monetary base
The ratio of government spending to the level of GDP
The ratio of taxes to disposable income
The ratio of investment to savings in an economy
The term perfectly elastic demand refers to a situation where:
Consumers are willing to buy any quantity of a good at a given price
Consumers are only willing to buy a fixed quantity of a good at any price
The quantity demanded of a good does not change regardless of the price
The demand for a good is perfectly inelastic
Which of the following is a measure of income inequality?
Gini coefficient
Consumer Price Index (CPI)
Producer Price Index (PPI)
Lorenz curve
The multiplier effect refers to:
The impact of an initial change in spending on aggregate demand and, consequently, on real GDP
The tendency of consumers to save a large portion of their income
The effect of an increase in the money supply on interest rates
The impact of inflation on purchasing power
The natural rate of unemployment is:
The level of unemployment that occurs when the economy is at full employment
The level of unemployment that occurs when the economy is in a recession
The level of unemployment that occurs when there is no frictional or structural unemployment
The level of unemployment that occurs when there is no cyclical unemployment
The term liquidity trap refers to a situation where:
Interest rates are so high that people prefer to hold cash rather than invest or spend
Interest rates are so low that people prefer to hold cash rather than invest or spend
Inflation is high, leading to a decrease in the purchasing power of money
The central bank loses control over the money supply
Which of the following is a measure of the responsiveness of quantity demanded to a change in price?
Price elasticity of demand
Cross-price elasticity of demand
Income elasticity of demand
Price elasticity of supply
The term commodity money refers to:
Money that has intrinsic value, such as gold or silver
Money that is backed by the government's promise to exchange it for a commodity
Money that is used for international trade
Money that is created by the central bank
The term money market refers to:
The market for financial assets with maturities of one year or less
The market where foreign exchange rates are determined
The market for long-term government bonds
The market for commodities like gold and silver
The term velocity of money refers to:
The speed at which money changes hands in an economy
The total amount of money in circulation in an economy
The total amount of money held by households and businesses
The total amount of money held by banks as reserves
If the economy is in a recessionary gap, it implies that:
Actual output is less than potential output
Actual output is greater than potential output
The inflation rate is high
The unemployment rate is low
The term sticky prices refers to:
Prices that do not change quickly in response to changes in supply and demand
Prices that are set by the government and cannot be changed by firms
Prices that are adjusted continuously in response to changes in the economy
Prices that are set by monopolies to maximize profit
The term open market operations refer to:
The buying and selling of government securities by the central bank to influence the money supply
The buying and selling of goods and services in international markets
The buying and selling of stocks in the stock market
The buying and selling of consumer goods in a free market economy
If the nominal interest rate is 5% and the inflation rate is 3%, the real interest rate is:
8%
2%
3%
5%
The term marginal propensity to consume (MPC) refers to:
The change in consumption resulting from a change in disposable income
The total amount of consumption in an economy
The change in investment resulting from a change in interest rates
The total amount of saving in an economy
Which of the following is an example of a regressive tax?
Sales tax
Progressive income tax
Property tax
Corporate income tax
The term circular flow of income refers to:
The continuous flow of goods and services between households and firms in an economy
The circular flow of money between households and firms in an economy
The circular flow of resources between households and firms in an economy
The circular flow of exports and imports in an open economy
The term balance of trade refers to:
The difference between a country's exports and imports of goods and services
The difference between government revenues and expenditures
The difference between a country's savings and investments
The difference between the government budget deficit and surplus
The term complementary input refers to inputs that are:
Used together in the production process
Used interchangeably in the production process
Completely unrelated in the production process
Unrelated to the production process
The term tax incidence refers to:
The way in which the burden of a tax is shared between buyers and sellers in a market
The total amount of revenue collected by the government from taxes
The impact of a tax on the overall level of prices in an economy
The distribution of income among different households in an economy
The term deadweight loss refers to:
The loss of economic efficiency that occurs when a market is not in equilibrium
The loss of consumer surplus that occurs when prices increase
The loss of producer surplus that occurs when prices decrease
The loss of government revenue due to taxes
The term liquidity refers to:
The ease with which an asset can be converted into cash without loss of value
The total amount of money in circulation in an economy
The total amount of money held by households and businesses
The total amount of money held by banks as reserves
The term cost-push inflation is caused by:
An increase in production costs that leads to higher prices
An increase in consumer demand for goods and services
An increase in government spending on infrastructure projects
An increase in the money supply by the central bank
The term monetary policy refers to:
Central bank policies related to interest rates and money supply to influence the economy
Government policies related to taxation and spending to influence the economy
Policies aimed at regulating international trade
Policies related to the regulation of financial markets