What is the main purpose of the Federal Reserve System? How does it fulfill this purpose?
The Federal Reserve sets the monetary policy. The Fed's main charge is to safeguard the proper functioning
of our money system, in order to promote economic stability and growth. It does this mainly by setting
legal reserve requirements and the discount rate, and by conducting open market operations.
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Comment on the following statement: "If one player in the game does not have a dominant strategy, it is impossible to predict the outcome of the game."
What will be an ideal response?
If C = $500, I = $150, G = $100, NX = $40, and GNP = $800, how much is NFP?
A) -$10 B) -$5 C) $5 D) $10
Why does increasing employment not necessarily increase living standards?
a. Productivity always increases as employment increases. b. Living standards and employment are always positively related. c. Increasing employment may not be accompanied by higher real wages d. There is no upper limit to labor force participation. e. Real wages are not adjusted for inflation.
The flat portion of the long-run average total cost curve is a result of: a. economies of scale
b. diseconomies of scale. c. constant returns to scale. d. diminishing marginal returns.