Which of the following characterizes the Fed's ability to prevent recessions?
A) The Fed is able to "fine tune" the economy and entirely eliminate recessions.
B) The Fed is incapable of changing aggregate demand through its monetary policy tools.
C) The Fed is able to keep a recession shorter and milder than it would otherwise be.
D) The Fed is able to eliminate the business cycle and achieve absolute price stability.
Answer: C
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The cost of producing an additional unit of a good or service that falls on people other than the producer is the marginal
A) external cost. B) private cost. C) social cost. D) social benefit. E) None of the above answers is correct.
Which of the following is NOT part of the first big economic question?
A) What goods and services are produced? B) How are goods and services produced? C) For whom are goods and services produced? D) Why do incentives affect only marginal costs?
Monopolistic competition is characterized by
a. one firm selling several products. b. many firms selling the same product. c. many firms selling slightly different products. d. one firm selling one product.
The seven members of the Board of Governors of the Federal Reserve are appointed by
A) Congress. B) the President. C) the Governors of the States. D) leaders in the banking industry. E) the Treasury Department.