The likelihood that the Fed will implement a change that will seriously harm the economy is minimized by the fact that:
A. there is decision making by committee.
B. Congress can remove the Chairman of the Fed at any time.
C. the Board of Governors ultimately must answer to the U.S. President since he can replace them.
D. only bright, well-intentioned people are appointed to key roles at the Fed.
Answer: A
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Selling a good abroad below the price charged in the home market is
A) a basic argument for free trade. B) the infant industry argument. C) dumping. D) a voluntary restraint agreement.
Why do many economists rate the income tax high in efficiency and equity terms?
Which of the following factors best explains why consumers might prefer to go to a restaurant that was similar to another restaurant in terms of décor and food choices but had fewer customers?
a. the presence of network externalities b. the idea that some people receive utility from goods they believe are popular c. income and substitution effects d. switching costs
A firm purchases more capital equipment, which is a subsitute to labor. We would expect to observe
A. an increase in the wage rate paid for labor by this firm. B. a rightward shift in the supply curve of labor to this firm. C. a decrease in the supply of labor for this firm. D. a decrease in the demand for labor by this firm.