How does the Fed decide which monetary measure should be the focus of its monetary policy choices?
A) The Fed would like to track a monetary measure that is most closely related to the market interest rate.
B) The Fed would like to track a monetary measure that is most closely related to the quantity of money demanded by economic agents.
C) The Fed would like to track a monetary measure that is most closely related to the level of real GDP and the price level.
D) The Fed would like to track a monetary measure that is most closely related to government spending.
Ans: C) The Fed would like to track a monetary measure that is most closely related to the level of real GDP and the price level.
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Jane lives and works in New York. Every month she sends $500 to her mother in London. This is an example of a(n) ________
A) import by the U.S. B) transfer payment to the U.K. C) export by the U.S. D) factor payment to the U.K.
Which of the following is a fixed cost for ACME manufacturing?
A) wages paid to labor B) the annual fire and theft insurance premiums C) the utility bill D) raw material costs E) the cost of shipping its product to market
Financial markets promote economic efficiency by
A) channeling funds from investors to savers. B) creating inflation. C) channeling funds from savers to investors. D) reducing investment.
At low levels of production, marginal productivity of labor increases as labor increases. At high levels of production, marginal productivity of labor decreases as labor increases. Are these two statements contradictory? Explain
What will be an ideal response?