Question

Question 18 (3 points)

Which of the following is an example of an "open market operation"?

a	The Federal Reserve sells $100 million worth of Treasury bonds to banks.
b	The government issues $100 million worth of Treasury bonds to finance its deficit.
c	Jeff Bezos buys $100 million worth of Treasury bonds for his personal portfolio.
d	The Treasury prints $100 million worth of currency.

Question 19 (3 points)

Frank's Fish Fry sells fish fry dinners. Frank's revenue equals the quantity of fish fry dinners he sells times the price he charges for a fish fry dinner.

From last year to this year, his quantity increases by 4% and the price he charges increases by 3%. Frank's revenue increases approximately by

a	4%
b	3%
c	7%
d	1%
e	12%

Question 20 (3 points)

Nominal GDP = 600, real GDP = 400, and the nominal money supply equals 200.

Velocity equals

a	3
b	2
c	600
d	800
e	400

Answer 1

Q.18

Solution-: Correct option is A

Explanation-: Open Market operation is an operation in which federal bank sell and purchase government securities on the behalf of government. Here, Federal Reserve sells $100 million worth of Treasury bonds to banks.So, it is an example of an "open market operation".

Q19.

Solution-: Correct Option is A

Explanation-: Frank's revenue increases approximately by 4% because Frank's revenue equals the quantity of fish fry dinners.As quantity increases by 4% Frank's Revenue increases 4%.

Q20.

Solution-Correct option is A

Explanation-

Nominal GDP=600

Nominal money supply=200

Velocity= Nominal GDP/Nominal Money Supply

=600/200

=3