The Fed is institutionally independent. A major disadvantage of this is that monetary policy
A. will always be coordinated with fiscal policy.
B. is not subject to democratic control as other policies are.
C. will never offset fiscal policy.
D. cannot be changed once it has been instituted.
Answer: B
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Economics is primarily the study of
a. how to make money in the stock market. b. how to operate a business successfully. c. the allocation of scarce resources in an effort to satisfy wants that are virtually unlimited. d. the methods business firms use to reduce their costs of production.
Which of the following would not occur if all large firms in the economy were broken into smaller firms?
A. Decreased manufacturing efficiency in some industries B. Increased competition in all industries C. Decreased investment in research and development in some industries D. Increased prices for some manufactured goods
Contractionary fiscal policy ... aggregate demand and in the short run ... real GDP
What will be an ideal response?
Suppose there are four firms in an industry. The market shares of the four firms are 5 percent, 20 percent, 35 percent, and 40 percent. The Herfindahl-Hirschman index for that industry is
A. 1,250. B. 6,650. C. 100. D. 3,250.