Technically, the Federal Reserve district banks are corporations whose stockholders are the
A. state governments in each district.
B. citizens of the United States.
C. Departments of Treasury and Commerce.
D. member banks.
Answer: D
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The price elasticity of demand for any good must be less than or equal to zero unless
a. the good is a necessity. b. the good is a luxury. c. the good is a Giffen good.
In order to eliminate unnecessary details and highlight the essential features of an economic model, an economist makes
a. critical assumptions b. macroeconomic assumptions c. normative assumptions d. positive assumptions e. simplifying assumptions
An open market purchase of bonds by the Fed
a. will shift the money supply curve to the left. b. will drain reserves from the banking system and shift the money supply curve to the right. c. will inject reserves into the banking system and shift the money supply curve to the left. d. will shift the money supply curve to the right. e. will change the slope of the money supply curve.
In its day-to-day operations, the Fed focuses on
a. an unemployment rate target b. an inflation rate target c. an interest rate target d. a money demand curve target e. several economic targets together