When the Federal Reserve System was first established, its founders intended the Fed to
A. assist the Treasury in collecting taxes.
B. be primarily responsible for government regulations.
C. pursue an active monetary policy to stabilize the economy.
D. provide protection against financial panics by acting as the lender of last resort.
Answer: D
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What factors are not important in determining exchange rate fluctuations in the long run?
A) preferences for domestic and foreign goods across countries B) speculating in currency markets C) relative price levels across countries D) relative rates of productivity growth across countries
The values of real GDP and real GNP are almost the same in countries where a significant fraction of domestic production takes place in foreign-owned firms
Indicate whether the statement is true or false
The replacement of the phonograph by the cassette tape player and the eventual replacement of the latter by CD and MP3 players is an example of
a. economies of scale. b. planned obsolescence. c. diseconomies of scale. d. creative destruction.
Externalities are direct benefits or costs accruing to individuals or groups of individuals who were not participants in the activity.
Answer the following statement true (T) or false (F)