Value added is calculated by:
A. subtracting the cost of materials used in production from the value of sales.
B. adding the cost of materials used in production to the value of sales.
C. adding the value of output to the value of inputs.
D. subtracting the value of sales from the cost of materials used in production.
Answer: A
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A deadweight loss occurs in a
A) monopoly. B) perfectly competitive market. C) market in which the market clearing price of a good equals the marginal cost of producing it. D) market in which the market clearing price of a good is below the marginal cost of producing it.
During the Great Depression of 1929–1933,
a. the Fed allowed the money supply to contract substantially. b. the Fed increased the money supply sharply. c. Congress cut tax rates sharply. d. Congress cut tariffs substantially.
From September 2007 to April 2008 the Fed lowered the federal funds rate from 5.25 percent to 2 percent in a series of steps. The Fed's actions were largely in response to:
A. threats to the financial system from the mortgage default crisis. B. forecasts of higher inflation rates. C. Chinese refusal to allow their exchange rate to reflect market conditions. D. pressure from the president to offset contractionary effects of a tax increase.
Which of the following is the basic economic policy function of the Federal Reserve Banks?
A. Holding the deposits or reserves of commercial banks. B. Acting as fiscal agents for the federal government. C. Controlling the supply of money. D. The collection or clearing of checks among commercial banks.