Although reserve requirements and the discount rate are not actually set by the ________, decisions concerning these policy tools are effectively made there
A) Federal Reserve Bank of New York
B) Board of Governors
C) Federal Open Market Committee
D) Federal Reserve Banks
C
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A chief reason firms give employees bonuses based on the firm's profit is to cope with
A) the tax laws. B) the law of diminishing returns. C) the principal-agent problem. D) unions.
The distinction between M1 and M2 is based on
a. portability-the ease with which an asset can be moved. b. divisibility-the ease with which an asset can be used to make smaller payments. c. liquidity-the ease with which an asset can be converted into cash. d. storability-how long an asset will retain its value.
Assume the MPC is 0.80. If the government wants to eliminate an AD shortfall of $300 billion, it should
A. Cut taxes by $75 billion. B. Increase taxes by $60 billion. C. Cut taxes by $240 billion. D. Cut taxes by $60 billion.
Recall the Application about the price competition between satellite and cable TV services to answer the following question(s).Recall the Application. In most cases where satellite TV service is introduced in an area with cable TV service, if the quality of cable TV service increases, then consumer surplus (in the cable TV market):
A. increases. B. decreases. C. drops to zero. D. becomes negative.