The Fed can conduct monetary policy in all the following ways except:
A. changing the discount rate.
B. executing open market operations.
C. running deficits.
D. changing the reserve requirement.
Answer: C
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Use the following graph showing the average total cost curve for a perfectly competitive firm to answer the next question.
At the long-run equilibrium level of output, this firm's profit
A. is $400. B. is zero. C. is $200. D. cannot be determined from the information provided.
An expansionary monetary policy is always capable of boosting aggregate investment
a. True b. False Indicate whether the statement is true or false
Which of the following central banks does not have an explicit inflation target?
a. The Bank of England b. The Federal Reserve c. Swiss National Bank d. European Central Bank e. The Reserve Bank of India
Raising taxes as an element of discretionary fiscal policy is intended to reduce aggregate demand, but it can also reduce aggregate supply if
a. the higher taxes lead workers to seek out a second job. b. the higher taxes cause workers to work less. c. the government purchases goods with the additional revenue. d. the government uses the additional revenue to retire some of the federal debt. e. the higher taxes cause people to save less.