Discretionary monetary policy has the drawback that it
A) must lead to very high inflation.
B) is currently illegal in the United States.
C) makes inflation expectations harder to manage.
D) cannot be implemented using changes in the federal funds rate.
E) None of the above answers is correct.
C
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If average fixed cost exceeds average variable cost at a particular level of output: a. Profits must be negative
b. That fact is meaningless for deciding the quantity of output to produce. c. Output levels are probably quite low relative to the designed capacity of the production facility. d. Both b and c. are likely true.
GDP per person tells us the income and expenditure of the
a. richest person in the economy. b. poorest person in the economy. c. average person in the economy. d. entire economy.
Bank regulators are concerned about the safety of depositors because
A. bank failures were common throughout most of the U.S. history and have even occurred in recent decades. B. in the absence of federal insurance, depositors would lose their money if a bank failed. C. nervous depositors may rush to withdraw their accounts and produce a “run” that could threaten even a sound bank. D. All of these responses are correct.
If Maria spends a fixed dollar amount per week on movie rentals regardless of changes in the price, Maria's demand for movie rental can be considered:
A. elastic. B. unit elastic. C. inelastic. D. There is not sufficient information to determine the price elasticity.