The agency directly responsible for monetary policy in the United States is
A. the twelve Federal Reserve Banks.
B. the Board of Governors of the Federal Reserve System.
C. the Congress of the United States.
D. the United States Treasury.
B. the Board of Governors of the Federal Reserve System.
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You have found data that indicates that the income elasticity of demand for generic (unbranded) shampoo is -0.7. You should conclude that generic shampoo:
A. has inelastic demand. B. is below its equilibrium price. C. is an inferior good. D. is a normal good.
Referring to the previous question, all else constant, a 5 unit increase in the wage index would cause:
A) quantity supplied to increase by 9 units and be shown by a movement up the supply curve. B) quantity supplied to decrease by 9 units and be shown by a movement down the supply curve. C) quantity supplied to increase by 9 units and be shown by a rightward shift of the supply curve. D) quantity supplied to decrease by 9 units and be shown by a leftward shift of the supply curve.
If the required reserve ratio is increased from .1 to .2, the demand deposit expansion multiplier
A) increases from 10 to 5. B) increases from 4 to 4.5. C) decreases from 5 to 2.5. D) decreases from 10 to 5.
In fiscal year 2001, the U.S. government ran a surplus of about $127 billion. In fiscal year 2002, the government ran a deficit of $159 billion. Other things the same, this change would be expected to have
a. decreased interest rates and investment. b. decreased interest rates and increased investment. c. increased interest rates and investment. d. increased interest rates and decreased investment.