Which of the following is TRUE of the Federal Reserve System?
a) It is controlled by the executive branch of the federal government.
b) It is subject to oversight from Congress.
c) It is not the central bank of the United States.
d) It was established as part of the U.S. Constitution.
Ans: b) It is subject to oversight from Congress.
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If a demand curve goes through the point P = $6 and Qd = 400, then
A. $6 is the highest price consumers will pay for 400 units. B. $6 is the lowest price consumers can be charged to induce them to buy 400 units. C. 400 units are the most consumers will buy if price is $6. D. consumers will buy more than 400 if price is $6. E. both a and c
The Keynesian cause-and-effect sequence predicts that a decrease in the money supply will cause interest rates to:
A. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP. B. fall, boosting investment and shifting the AD curve rightward, leading to a decrease in real GDP. C. rise, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP. D. rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
The city of Hope has a labor force of 1000. Twenty people lose their jobs each month and remain unemployed for exactly one month before finding jobs. On January 1, May 1, and September 1 of each year, 50 people lose their jobs for a period of four months before finding new jobs. What is the average duration of an unemployment spell?
A. 3.43 months B. 2.85 months C. 2.15 months D. 3.14 months
Firms A and B can conduct research and development (R&D) or not conduct it. R&D is costly but can increase the quality of the product and increase sales
The payoff matrix is the economic profits of the two firms and is given above, where the numbers are millions of dollars. A's best strategy is to A) conduct R&D regardless of what B does. B) not conduct R&D regardless of what B does. C) conduct R&D only if B conducts R&D. D) conduct R&D only if B does not conduction R&D.