Does the Fed have good control over the money supply?
A. Yes, open-market operations generate exact changes in bank lending.
B. Yes, reserve requirements create new loans.
C. No, because of difficulties estimating the reserve ratio.
D. No, because of difficulties estimating the size of the excess reserves and cash holdings by the public.
Answer: D
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Suppose the actual equilibrium federal funds rate is above the rate implied by a particular inflation goal. In this situation, the Taylor rule implies that
A) monetary policy is contractionary. B) monetary policy is expansionary. C) fiscal policy is expansionary. D) fiscal policy is contractionary.
The market demand curve for any good is:
a. independent of individuals' demand curves for the good. b. the vertical summation of individuals' demand curves. c. the horizontal summation of individuals' demand curves. d. derived from the firm's marginal cost of production.
Pricing is made difficult by
A) firms having multiple products. B) concerns about the response of competitors. C) concerns about consumer linkages of price and quality. D) all of these choices make pricing difficult.
What are the three noteworthy labor market trends that Americans have experienced for about two decades?
What will be an ideal response?