In recent years, the Federal Reserve has conducted policy by setting a target for the
a. size of the money supply.
b. growth rate of the money supply.
c. federal funds rate.
d. discount rate.
c
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Some would cite the purchase of defective products and the rising cost of health care as market failures. Argue that these are not true market failures.
What will be an ideal response?
Grapes can be used to produce wine or raisins. Which graph in Figure 4-6 best depicts the effects on the U.S. raisin market of a decline in purchases of domestic wine?
A. 1 B. 2 C. 3 D. 4
Along the short-run supply curve (SRAS), a decrease in the aggregate demand curve will decrease: a. both the price level and real GDP
b. real GDP without raising the price level. c. the price level without affecting real GDP. d. the price level but reduce real GDP.
Which of the following tools of monetary policy is flexible and able to affect bank reserves quickly and by relatively specific amounts?
A. The discount rate. B. The reserve ratio. C. Open-market operations. D. The federal funds rate.