The two main responsibilities of the Federal Reserve System are to ________ and to ________.
A. insure bank deposits; print currency
B. enable banks to make affordable mortgages; control the exchange rate of the U.S. dollar
C. apprehend counterfeiters; regulate the stock market
D. conduct monetary policy; oversee financial markets
Answer: D
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If a union negotiated a wage above the market equilibrium wage, we would find
A) a surplus of laborers at the negotiated wage. B) a shortage of laborers at the negotiated wage. C) higher efficiency of labor at the negotiated wage. D) lower worker productivity at the negotiated wage.
If the Fed raises the discount rate, it:
a. forces commercial banks to call in existing loans. b. changes excess reserves into required reserves. c. changes required reserves into excess reserves. d. none of the above
A program of protection that results in preserving jobs in certain industries
a. raises average productivity in all sectors of the economy. b. does so at very high cost to consumers of the products from those industries. c. is an efficient way to preserve employment, and is cheaper than other forms of maintaining full employment. d. is an effective way of encouraging innovation and improvement in production.
The labor force participation rate:
A. is used as an indication of the health of the overall economy. B. typically rises during times of recession, as more people need work. C. tells us what fraction of the working-age population wants to be working, whether or not they actually have a job. D. All of these are true.