If the target rate of interest is higher than the current equilibrium interest rate, the Fed will: A. buy Treasury bills, decrease the supply of money, and increase the interest rate back to the target rate. B. sell Treasury bills, decrease the supply of money, and increase the interest rate back to the target rate. C. sell Treasury bills, increase the supply of money, and increase the interest rate back to the target rate. D. sell Treasury bills, increase the supply of money, and decrease the interest rate back to the target rate. E. buy Treasury bills, increase the supply of money, and decrease the interest rate back to the target rate.

Which of the following pairs is most similar to each other? a. barter goods and fiat money b. digital money and barter goods c. fiat money and digital money d. commodity money and digital money

Aprice ceiling is “binding” if the price ceiling is set below the equilibrium price. suppose that the equilibrium price is $5. if a price ceiling is set at $6, this will not affect the market in any way since $5 remains a legally allowable price (since $5 < $6). a price ceiling of $6 is called a “non-binding” price ceiling. on the other hand, if the price ceiling is set at $4, the price ceiling is “binding” because the natural equilibrium price is $5 but that is no longer allowed. what happens when there is a binding price ceiling? at a price below the equilibrium price, quantity demanded exceeds quantity supplied. there is a shortage. normally, price increases eliminate shortages by increasing quantity supplied and decreasing quantity demanded. in this case, however, price increases are not allowed past the price ceiling. we therefore predict that the observed market price will be right at the price ceiling and there will be a permanent shortage. the observed quantity bought and sold will be dictated by the quantity supplied at the price ceiling. although consumers would like to buy more, there are no more units for sale

If springfield is operating at full employment who is working a. everyone b. about 96% of the workforce c. the entire work force d. the robots