Which of the following is an example of a monetary policy?
A) The federal government increases income tax rates on people earning more than $250,000.
B) The duration of unemployment benefits is extended to 99 weeks.
C) The Federal Reserve increases interest rates.
D) Congress authorizes a cut in spending on education.
C
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Food stamps provided by the U.S. Department of Agriculture are an example of
A) a positive externality. B) a private subsidy. C) vouchers. D) an external benefit.
Demand for staples such as dairy products and bread is likely to be both income and price inelastic
Indicate whether the statement is true or false
The reduction or covering of a foreign exchange risk is called
A) hedging. B) speculation. C) intervention. D) arbitrage.
When the existing firms in a monopolistically competitive industry earn above-normal profit:
a. new firms enter into the market, and entry continues until firms earn normal profit. b. new firms have no incentive to enter the market. c. new firms have an incentive to enter the market but are legally barred from doing so. d. they increase their production and lower the price level. e. their cost structure automatically changes, eliminating the additional profit.