Since World War II, the Federal Reserve has not been involved in carrying out monetary policy
Indicate whether the statement is true or false
FALSE
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When the price of a good changes, the amount of that good that buyers wish to buy changes:
A. solely because of the substitution effect. B. only if the substitution effect and the income effect do not cancel out each other. C. because of both the substitution and the income effects. D. solely because of the income effect.
The Board of Governors of the Fed consists of: a. seven elected members
b. seven members appointed by the president. c. a representative from each of the 12 district banks. d. 12 elected members. e. 12 members appointed by the president.
The greater the magnitude of the external benefits of production, a. The larger is the deadweight loss from underproduction
b. The greater would be the optimal subsidy. c. The further the private market solution ignoring those benefits would deviate from the socially efficient level of output. d. All of the above are true
When the interest rate rises, bond values
A. rise. B. fall. C. will either increase or decrease depending on the type of bond. D. are unchanged because the interest rate paid on a bond is fixed.