A monetary policy reaction curve requires the central bank to have a(n):
A. economic growth target.
B. money growth target.
C. inflation target.
D. unemployment target.
Answer: C
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State whether the following statement is true or false AND explain why: "A decrease in the discount rate will always cause a decrease in the federal reserve funds rate."
Indicate whether the statement is true or false
Under a fractional-reserve banking system, the money supply cannot change without any action from the Federal Reserve
a. True b. False Indicate whether the statement is true or false
The largest component of U.S. GDP is:
A.) Government services at the federal, state and local levels combined. B.) Business investment. C.) Household consumption. D.) Net exports.
What is the potential drawback if firms follow a price leadership model in an actual market?
A) The price leader's behavior may be interpretted as collusion and be subject to antitrust sanctions. B) Excessive price signalling may force all of the firms to adopt price-taking strategies, which reduces overall profits among the firms. C) Disputes about which firm should be the price leader may lead to price wars. D) Signalling efforts increase the firms' fixed costs of production.