Recall the Application about the effectiveness of committees in making decisions about monetary policy to answer the following question(s). Recall the Application. If the Federal Reserve was making a decision on changing interest rates:
A. the chairperson, acting alone, would typically make a better decision than the Board of Governors.
B. the Board of Governors would typically make a better decision than the chairperson acting on his/her own.
C. the Board of Governors would typically make an equally good decision as would the chairperson acting on his/her own.
D. neither the Board of Governors nor the chairperson, acting alone, would tend to make accurate predictions.
Answer: B
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In repeated games, all of the following allow a firm to escape an inefficient "prisoners dilemma" equilibrium except
a. Be nice, don't strike first b. Respond immediately to non-cooperation c. Punish competitors as much as you can d. Make sure your competitors can easily interpret your actions
According to the text, which of the following factors may make the theory of purchasing power parity unrealistic?
A) Trading countries may stop exchanging goods once prices between them equalize. B) Shipping, insurance, and transaction costs may reduce the implication of purchasing power parity. C) Prices may not equalize if goods arbitrage is reduced by trade barriers. D) The effects of purchasing power parity may not show up until many years have passed.
Explain how corporate profits are taxed twice
What will be an ideal response?
Suppose the required reserve ratio is 20 percent. If banks are conservative and choose not to loan all of their excess reserves, the real-world deposit multiplier is
A) less than 5. B) equal to 5. C) greater than 5. D) equal to 20.