Suppose workers do not believe the Fed will implement its announced monetary policy plans and the Fed wants to achieve low unemployment. In this situation the Fed would be best off:
a. implementing a policy of high money growth.
b. announcing and implementing a policy of low money growth.
c. announcing a policy of high money growth and implementing a policy of low money growth.
d. following a policy that forces the actual inflation rate to coincide with the expected inflation rate.
e. promoting a low rate of inflation and adjusting actual policy plans to economic conditions.
a
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Which of the following has been a problem faced by the FDIC in its provision of federal deposit insurance?
A) a relatively low number of bank failures each year, which has reduced the need for deposit insurance B) moral hazard arising from the tendency for the highest-risk banks to be those most interested in obtaining deposit insurance in the first place C) adverse selection arising from the tendency for banks to take on more risk after they receive deposit insurance D) moral hazard arising from the tendency for banks to take on more risk after they receive deposit insurance
A barter exchange
A) always takes place without greed on behalf of the trading parties. B) takes place without money. C) tends to have lower transaction costs compared to exchanges using money. D) is characterized by all of the above.
The U.S. legal system mainly engages in activities that
A) are dedicated to producing private goods. B) focus on income redistribution. C) involve defining and protecting property rights. D) focus on producing public goods.
Monopolies are inefficient because they (i) eliminate barriers to entry. (ii) price their product at a level where marginal revenue exceeds marginal cost. (iii) restrict output below the socially efficient level of production
a. (i) and (ii) only b. (ii) and (iii) only c. (iii) only d. (i), (ii), and (iii)