Tariffs help consumers by lowering the price of imported goods
a. True
b. False
Indicate whether the statement is true or false
False
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The dollar amount of reserves a bank is obligated by regulation to hold as cash in the bank's vault or on account at the Fed is called the excess reserves
Indicate whether the statement is true or false
Which of the following offers the most likely explanation of why average total cost is falling in a cereal factory?
a. Production bottlenecks and equipment breakdowns have stalled production. b. The production facility was designed for a lower level of output. c. The wholesale prices of grains and fruit have risen due to market demands. d. The cost of producing an additional box of cereal is less than the factory’s average total cost.
If output falls 1.0 percentage point below its potential, the Taylor rule predicts that the Fed should:
A. reduce the federal funds rate by 0.5 percentage points. B. raise the federal funds rate by 1.0 percentage points. C. raise the federal funds rate by 1.5 percentage points. D. reduce the federal funds rate by 1.0 percentage points.
Using Figure 3 above, suppose that the economy was at Y1. This level of GDP would be considered:
A. a long run level of output. B. a natural rate of output. C. recessionary. D. inflationary.