Traditionally, the Fed often communicated its intentions to restrict or expand monetary policy by announcing a change in its target for the:
A. Prime rate
B. Federal funds rate
C. Discount rate
D. Consumer price index
B. Federal funds rate
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Data on output and aggregate expenditure in Macroland are given below.Output(Y)Aggregate Expenditure1,0001,7502,0002,5003,0003,2504,0004,0005,0004,750Based on these data, the short-run equilibrium level of output is:
A. 5,000. B. 2,500. C. 4,000. D. 1,000.
Ricardian equivalence implies a tax multiplier of zero
a. True b. False
A regulatory agency that requires a firm to provide “universal service” must
A. prevent high profits in all markets. B. allow the firm to cross-subsidize. C. prevent cross-subsidization. D. guarantee marginal cost pricing.
An increase in capital will increase real GNP per person
a. more in a poor country than a rich country. The increase in real GNP per person will be larger if the addition to capital is from domestic rather than foreign investment. b. more in a poor country than a rich country. The increase in real GNP per person will be larger if the addition to capital is foreign rather than from domestic investment. c. less in a poor country than a rich country. The increase in real GNP per person will be larger if the addition to capital is from domestic rather than foreign investment. d. less in a poor country than a rich country. The increase in real GNP per person will be larger if the addition to capital is foreign rather than from domestic investment.