Which of the following is a reason that the Fed does not traditionally attempt to limit asset price bubbles?
a. The Fed's policies cannot be targeted at only one sector of the economy.
b. Price changes for one asset or one industry cannot have a substantial impact on the entire economy.
c. The FDIC rather than the Fed is responsible for recognizing bad lending practices.
d. all of the above
a
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Monetary policy consists of changes in taxes, which in turn affects the amount of money households can spend on consumption
Indicate whether the statement is true or false
Minimum wage legislation
a. has little effect on university professors. b. raises incomes of unskilled laborers who have jobs. c. prevents some willing workers from getting jobs. d. All of the above are true.
Keynesian belief that the aggregate supply curve is relatively flat in the short run means that they expect their policies to cause
a. small increases in output and much inflation. b. small increases in output and little inflation. c. large increases in output and little inflation. d. large increases in output and much inflation.
Define the following terms and explain their importance to the study of macroeconomics:
a. exchange rate b. depreciation c. devaluation d. fixed exchange rates