The Fed's principal objective is to
a. make profits to pay into the U.S. Treasury.
b. collect tax revenues.
c. supervise the business decisions of banks.
d. manage the money supply and interest rates.
d
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If workers and firms can fully anticipate the price change in the economy from a particular policy
A) then the policy will not impact employment levels. B) then the policy will not cause inflation. C) then the policy will be effective at changing employment levels. D) then the policy will be crowded out by the exchange rate.
An example of a capital good is
a. food produced by U.S. farmers in 2008 b. the car that your friend drives to school c. a house owned and occupied by a family d. the rent your friend paid last year for a college apartment e. a share of General Electric Company stock
Which of the following is the best definition of potential output?
a. The output that could be produced if the economy were above full employment b. The output that could be produced if the economy had no unemployment c. The output that could be produced if the economy had no frictional unemployment d. The output that could be produced if the economy were at full employment e. The output that could be produced if the economy had no structural unemployment
Refer to the graph shown. If the price level is P1 the:
A. aggregate demand curve will shift to the left in the long run to restore equilibrium. B. short-run aggregate supply curve will shift up (to the left) in the long run to restore equilibrium. C. short-run aggregate supply curve will shift down (to the right) in the long run to restore equilibrium. D. aggregate demand curve will shift to the right in the long run to restore equilibrium.