If it did not increase its target for the federal funds rate, the policy goal the Fed would be promoting is
What will be an ideal response?
Answer: Economic growth, because maintaining lower interest rates would stimulate the economy and raise the price level
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Which of the following characteristics differentiates a monopoly from a perfectly competitive firm?
a. The demand curve for a perfectly competitive firm is a downward-sloping line, while the demand curve for a monopoly is a horizontal line. b. The demand curve for a perfectly competitive firm is a horizontal line, while the demand curve for a monopoly is a downward-sloping line. c. The demand curve for a perfectly competitive firm is a horizontal line, while the demand curve for a monopoly is a vertical line. d. The demand curve for a perfectly competitive firm is a downward-sloping line, while the demand curve for a monopoly is a vertical line.
The tax increases necessary to fund future Social Security and Medicare benefit payments would be
A) small, but could discourage work effort, entrepreneurship, and investment, thereby slowing economic growth. B) large, but would have little effect on economic growth. C) large, and could discourage work effort, entrepreneurship, and investment, thereby slowing economic growth. D) small, and have little effect on economic growth.
Discuss the following:
(i) Discuss the impact of the substitution effect on a wage increase. (ii) Discuss the impact of the income effect on a wage increase. (iii) Based on these two effects, how does a wage increase affect the supply of labor?
How does an import quota differ from an equivalent tariff?