Which of the following is (are) responsible for managing the money supply in the United States?
A) the Federal Reserve Bank of New York
B) the twelve Federal Reserve Banks
C) the Federal Open Market Committee
D) the Board of Governors
Answer: C
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
A nation can determine how close it is to the classical range by considering its:
a. Export position. b. Net export position. c. Exchange rate. d. None of the above.
The hostage taking example was developed by
A) John Nash. B) Kydland and Prescott. C) John Harsanyi. D) Reinhard Selten.
If business leaders expect the new Congress to lower the corporate profits tax, most likely this will cause business firms, ceteris paribus, to
A. increase investment because the lower corporate profits tax will increase the return on any investment. B. plan to decrease investment in the future to compensate for the lower tax rate. C. decrease investment because they would expect lower benefits from investment. D. not change their investment plans because lower corporate profit taxes will not change the demand for their product.