Which of the following is an example of monetary policy?
A. Changes in income tax rates
B. The central bank buying government bonds
C. Raising social security payments in response to increased inflation
D. Changes in government spending on public works projects
Answer: B
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Consider the following data for a closed economy:
a. Y = $12 trillion b. C = $8 trillion c. I = $3 trillion d. TR = $2 trillion e. T = $3 trillion Use the data provided to calculate the level of private saving and the level of public saving and demonstrate their relationship to investment.
How many members can serve on the Board of Governors of the Federal Reserve System?
A. 9 B. 14 C. 7 D. 12
Suppose that there is only one small clothing store in the remote village of Green Acres, and until recently the townspeople bought their shirts there. As more people in Green Acres become connected to the Internet, the price elasticity of demand for shirts at the Green Acres store will:
A. increase because the Internet offers more substitutes. B. remain the same, but the quantity demanded will decrease as more people shop online. C. decrease because the Internet offers more substitutes. D. remain the same, but the demand will decrease as more people shop online.
If a demand shock causes the economy to move to a real GDP level that is below its full employment level, then
a. we refer to this as a positive demand shock. b. the economy will remain at this point in the long run. c. the AS curve will adjust in the long run until the economy returns to full employment. d. the AD curve will move back to its original position in the long run. e. the unemployment rate will decline.