Does the Federal Reserve operate like an ordinary commercial bank? What is the Fed's job?
Since the Fed is an independent branch of the government, it does not operate for profit. The Fed is also the only bank that can legally issue money-the Federal Reserve notes ($1 bills, $5 bills, etc.) that we carry around in our pockets. Finally, the Fed acts as a banker's bank. Most banks hold deposits at the Fed and occasionally borrow money from the Fed. The Fed also oversees the clearing of checks through the banking system.
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The short-run aggregate supply curve is upward sloping because in the short run the
A) money wage rate changes but the price level does not. B) price level changes but the money wage rate does not. C) both the money wage rate and the price level change. D) neither the money wage rate nor the price level can change.
Under the Exchange Rate Mechanism of the European Monetary System, when the British pound depreciated below its lower limit against the German mark, the Bank of England was required to buy ________ and sell ________,
thereby ________ international reserves. A) pounds; marks; losing B) pounds; marks; gaining C) marks; pounds; gaining D) marks; pounds; losing
Which of the following is characteristic of a monopolistically competitive firm?
A. The firm faces an upward-sloping demand curve. B. The firm faces an inelastic demand curve. C. The firm faces a horizontal demand curve. D. The firm produces a differentiated product.
In the housing market, rents serve the purpose of
A) making landlords rich. B) rationing the availability of existing housing. C) providing an entry by the government into the housing market. D) increasing tax collections by the community.