The main function of the Federal Open Market Committee is
a. to control the printing of currency.
b. to determine the path of tax rates.
c. to use open market operations to control the nation's money supply.
d. to create and issue bonds on behalf of the Treasury.
e. to oversee economic activity in the various Federal Reserve districts.
C
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Long-run macroeconomic equilibrium is achieved when the money wage rate has adjusted so that employment is such that real GDP equals potential GDP
Indicate whether the statement is true or false
The more time people have to adjust to a price change:
A. will not affect the elasticity of their response unless it is a luxury good. B. the less elastic their demand will be. C. the more elastic their demand will be. D. will not affect the elasticity of their response unless the good is a necessity.
Use the aggregate expenditures model and assume the marginal propensity to consume (MPC) is 0.90 . A decrease in government spending of $1 billion would result in a decrease in GDP of:
a. $0. b. $0.9 billion. c. $1.0 billion. d. $9.0 billion. e. $10.0 billion.
Which of the following transactions can be categorized as outsourcing?
a. A U.S. furniture manufacturer buying a lumber facility. b. A U.S. firm transferring some of its operations to its new subsidiary in India. c. Nike selling its sportswear to customers through its franchisees across the world. d. A U.S. cosmetics firm using an advertising agency to market its products.