A worker would be hurt least by inflation when the:
a. worker anticipates inflation and increases savings at the bank.
b. worker is protected by a cost-of-living adjustment clause in an employment contract.
c. price level increases but at a decreasing rate.
d. worker is protected by fixed annual increases in wages and benefits in an employment contract.
b
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Adam Smith used the metaphor of the "invisible hand" to explain how
A) business owners are benevolent. B) markets mismatch buyers and sellers. C) people acting on their own self-interest promote the interest of society as a whole. D) the production possibilities frontier illustrates efficient outcomes.
Which of the following statements is incorrect?
a. The Federal Reserve Open Market Committee determines fiscal policy actions for the Congress. b. The Board of Governors of the Federal Reserve is appointed, not elected. c. The Federal Reserve System was designed to be independent of the executive branch of the government. d. The chairman of the Board of Governors serves a four-year term. e. The Federal Reserve districts are distributed geographically to serve the particular interests of each region.
Suppose that an economy produces civilian goods and military goods. If technological breakthroughs increase its ability to produce military goods, then
a. fewer military goods will be produced b. more civilian goods will be produced c. the opportunity cost of producing military goods will rise d. there will be productive inefficiency in the economy e. the production possibilities frontier will pivot outward around the axis for military goods
The Board of Governors of the Fed:
A. consists of seven state governors who represent the views of individual states in monetary policy. B. consists of seven members appointed by the President of the United States, who together act as the key decision-making entity for monetary policy. C. consists of 13 large commercial bank CEOs who represent the interests of the private banking sector in monetary policy. D. is the primary monetary group responsible for buying and selling bonds designed to change reserves in the banking system. The Board of Governors is the key decision maker for monetary policy.