Which of the following is TRUE of the Federal Reserve System?
a) It is controlled by the executive branch of the federal government.
b) Its decisions must be approved by a majority vote by Congress.
c) It has the power to increase the money supply.
d) It does not influence interest rates.
Ans: c) It has the power to increase the money supply.
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward
Which of the following does NOT represent a way in which financial intermediaries take advantage of economies of scale?
A) paying lower brokerage fees per dollar invested B) paying lower legal fees per dollar invested C) purchasing sophisticated computer systems D) paying lower taxes per dollar invested
In the neoclassical growth model, break-even investment must cover
a. the depreciation in capital. b. the rate of technology growth. c. depreciation and capital for new workers (population growth). d. capital for new workers (population growth) and technology growth. e. none of the above.
Which of the following is an example of an undesirable side effect of the operation of the market mechanism?
A. Negative externalities B. Comparative advantages C. Abstractions D. Productivity growth