Why do adjustments to the discount rate by the Federal Reserve Board matter?
What will be an ideal response?
Answer: An ideal response will:
1. Explain the role of the Federal Reserve in controlling the money supply by controlling the rate at which banks can borrow money. This then affects the rate at which banks loan money to consumers and businesses.
2. Describe how adjusting the discount rate up or down will affect the money supply.
3. Illustrate how lowering the discount rate reduces the cost of money, which makes borrowing easier, which increases spending and affects economic growth.
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How do the guarantees of Social Security and Medicare create a policy challenge?
A. Decision makers have to keep programs solvent as well as dealing with political barriers to making any cuts that would maintain their solvency. B. Decision makers have to figure out to balance the requirements of funding these programs in the context of spending on other national needs. C. Decision makers must determine how to adjust the benefits and the taxes that fund these programs to more effectively redistribute income. D. Shifting control of these programs to independent agencies makes oversight a very challenging task.
In the U.S. House of Representatives, membership from each state is based upon
a. political party strength. b. appointment by the governor. c. equal representation from each state. d. population of the state. e. amount of funding allotted by the previous Congress.
“Market failure” is best defined as
a. a phenomenon that occurs when markets fail to perform efficiently or they fail to perform according to other widely held social values b. a phenomenon that occurs when markets perform efficiently or they perform according to other widely held social values c. a phenomenon that occurs when markets crash, generating an economic crisis such as during the Great Depression d. a phenomenon that occurs when markets experience simultaneous high inflation and high unemployment
Proposition 13 was the result of Californians' problems with
a. political gridlock b. property taxes of homes. c. gambling. d. school choice.