In June 2017, the Federal Open Market Committee raised the target for the federal funds rate to a range of 1.00 to 1.25 percent. To keep the federal funds rate in this target band, the Fed set the interest rate it pays on bank reserves to
A) 1.00 percent.
B) 1.125 percent, the mid-point of the target range.
C) 1.25 percent.
D) 2.25 percent.
Answer: C
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Which of the following is NOT an element of inflation targeting?
A) a public announcement of medium-term numerical targets for inflation B) an institutional commitment to price stability as the primary long-run goal C) an information-inclusive approach in which only monetary aggregates are used in making decisions about monetary policy D) increased accountability of the central bank for attaining its inflation objectives
A fixed-weight price index provides less accurate changes than a chain-weighted system
a. True b. False Indicate whether the statement is true or false
The point elasticity is a measure of the sensitivity of consumers to a large price change - a range from one price to another
a. True b. False Indicate whether the statement is true or false
If an economy produces only steel and wheat, a new fertilizer will
A) cause the production of wheat to increase at every point on a production possibilities curve but not affect the production of steel, that is the curve moves outward on the wheat axis only. B) cause the production of both wheat and steel to increase at every point along the production possibilities curve, that is the curve moves outward on both the wheat axis and the steel axis. C) not affect the production of either wheat or steel. D) cause the production of steel to increase at every point along the production possibilities curve but not affect the production of wheat, that is the curve moves outward on the steel axis only.