Who runs the Federal Reserve System? Describe the organizational structure of the Fed.
What will be an ideal response?
The Fed is run by the Board of Governors. There are 7 members of the Board of Governors, each appointed by the President of the United States with the confirmation of the U.S. Senate for 14 year terms. The Board of Governors are aided in their policy making by the Federal Advisory Council which consists of 12 prominent bankers, each appointed by the Presidents of the 12 Federal Reserve Banks located around the country. The Fed's chief policy-making body is the Open Market Committee which consists of the 7 Board of Governors plus 5 Federal Reserve District bank presidents.
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If the marginal propensity to save (MPS) increases, the multiplier
A) decreases. B) can either increase or decrease, depending on what happens to the marginal propensity to consume (MPC). C) increases. D) stays the same.
A the beginning of 2012, you pay $100 for a share of stock that then pays you a dividend of $1 at the beginning of 2013. If the stock price rises from $100 to $109 per share over the year, then you have earned an annual rate of return of
A) 5 percent. B) 1 percent. C) 9 percent. D) 4 percent. E) 10 percent.
When the social cost of production is greater than the private cost, we have a
a. positive externality b. negative externality c. public good d. private good e. positive spillover
What is the name of the monopolist having a declining long-run average cost throughout the market?
a. Monopolistic competition. b. Monopoly by legal barrier. c. Natural monopoly. d. Contrived monopoly.