The independence of the Fed
A. allows it to run a monetary policy different from that which elected officials might demand.
B. means that the Fed frequently pursues policies quite different from what the President asks for.
C. is widely agreed to be best for the nation's welfare.
D. is not real, since Congress must approve its policy.
A. allows it to run a monetary policy different from that which elected officials might demand.
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Proper inflation accounting is necessary to measure the size of the real deficit because
A. as a lender, the government gains from inflation. B. otherwise, the deficit is understated in inflationary times. C. the government is a borrower that pays back dollars of less real value in inflationary times. D. interest payments tend to fall in inflationary times.
If the dollar buys fewer bananas in Guatemala than in Honduras, then traders could make a profit by
a. buying bananas in Honduras and selling them in Guatemala, which would tend to raise the price of bananas in Honduras. b. buying bananas in Honduras and selling them in Guatemala, which would tend to raise the price of bananas in Guatemala. c. buying bananas in Guatemala and selling them in Honduras, which would tend to raise the price of bananas in Guatemala. d. buying bananas in Guatemala and selling them in Honduras, which would tend to raise the price of bananas in Honduras.
According to the text, which of the following does the United States export?
A. Cars, cigarettes, corn, farm equipment, and services. B. Cars and cigarettes but not corn. C. Lumber but not farm equipment. D. Cars, cigarettes, corn, and farm equipment, but not education.
Figure 7-4
Following a rash of airplane bombs, the airlines have been forced to increase security at a cost of $30 million per year. The number of inspectors and machines does not vary with the number of passengers-the airlines must have sufficient staff available to handle the full-capacity load. Which graph in Figure 7-4 best illustrates the impact of the security expenditures?
a. 1
b. 2
c. 3
d. 4