5. The Federal Open Market Committee (FOMC): a) b) c) d) Follows the actions and

Question

5. The Federal Open Market Committee (FOMC): a) b) c) d) Follows the actions and operations of financial markets to keep them open and competitive Monitors regulatory banking laws for member banks Provides acvice on banking policy to the Fed Sets policy on the sale and purchase of government bonds by the Fed 6. Which would be considered an investment according to economists? a) The purchase of stock in McDonald's b) The selling of IBM corporate bonds c) The buying of shares of Janus mutual funds d) Thepurchase of a new machine by Ford e) All of these are considered econ omic investment 7. A decrease in the rate of interest would decrease the opportunity cost of holding money. a) True b) False 8. The four economic fadtors of prodution are land, labor, capital, andgovernment services a) True b) False

Explanation / Answer

5. D - Sets policy on the sale & purchase of government bonds by federal reserve. (Functional Fact)

6. E - All of these are Economic Investments, Even purchasing a new mmachine by ford is an investment because that machine will be used as a tool for profit creation in the future. (cars).

7. True.

8. False, The four factors of production are land, labour, capital and entrepreneurship.

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