Consider the following scenario: The Kellogg's facility buys corn and makes boxes of cornflakes. The grocer buys those boxes and places them on the shelf. A mother then buys a box for her family. Which of the following would be classified as a purchase of a final good?
What will be an ideal response?
The cornflakes purchased by the mother.
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Use the following diagrams for the U.S. economy to answer the next question.
Which of the diagrams best portrays stagflation?
A. Graph A B. Graph B C. Graph C D. Graph D
If the demand for reserves remains constant and the market federal funds rate is below the target rate, the Fed would:
A. do nothing; the Fed will let the market work. B. decrease the IOER. C. increase the supply of reserves. D. increase the IOER.
Explain the concept of externality and give an example
Which of the following institutions is responsible for supervising the banking system of the United States?
A. The Federal Reserve System B. The Open Market Committee C. The U.S. Treasury D. The Federal Deposit Insurance Corporation