The Federal Reserve uses open market operations rather than changes in legal reserve requirements as its principal tool of monetary management because changes in legal reserve requirements
A) can be easily evaded by commercial banks.
B) must secure Congressional approval.
C) would be excessively powerful and disruptive.
D) would be less profitable for the Federal Reserve Banks.
C
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Refer to above figure. If the economy were in the initial position (where OmL1 workers were in manufacturing, what trade policy might gain ABC of economic welfare?
What will be an ideal response?
Saving is like:
A. selling the right to use your money for a time. B. buying the right to use someone else's money. C. selling the right to use someone else's money. D. buying the right to use your money for a time.
At the consumer's optimum the
a. budget constraint will have a slope of MUx/Px. b. slope of the indifference curve is equal to the slope of the budget constraint. c. indifference curve will intersect the budget constraint at the midpoint of the budget constraint. d. Both b and c are correct.
Money illusion results from expectations based on real purchasing power rather than current nominal income.
Answer the following statement true (T) or false (F)