Describe the structure of the Fed's Open Market Committee (FOMC). What is this committee's primary responsibility?
What will be an ideal response?
The FOMC is comprised of the seven members of the Board of Governors in Washington, D.C., the President of the Federal Reserve Bank of New York, and four Presidents (serving one-year rotating terms) from the remaining eleven district banks. This committee assumes primary responsibility for managing the U.S. money supply.
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An economic model suggests that an additional year of education increases a student's future wages by 15 percent. Using this model, answer the following questions:
a) Gary completes 8 years of education, and John completes 9 years of education. If Gary earns $20 per hour, how much is John expected to earn? b) John completes 9 years of education, and Kevin completes 12 years of education. Given John's earnings [as calculated in a)], how much is Kevin expected to earn? c) Is there any limitation to such a model? Explain your answer.
Excluding household and underground production leads to
A) underestimation of real GDP but not nominal GDP. B) overestimation of real GDP but not nominal GDP. C) overestimation of both real GDP and nominal GDP. D) underestimation of both real GDP and nominal GDP. E) underestimation of real GDP an overestimation of nominal GDP.
If the price level doubles, the value of money
A) doubles. B) more than doubles, due to scale economies. C) rises but does not double, due to diminishing returns. D) falls by 50 percent.
For the average person, insurance is
A. not a gamble. B. a useless option. C. a fair gamble. D. an unfair gamble.