If the Fed wants to shift toward a more expansionary policy, it often announces that it is going to change the federal funds interest rate. The Fed controls the federal funds interest rate
a. by imposing legal restrictions that prohibit exchanges at interest rates other than the ones designated by the Fed.
b. by having the U.S. Treasury fix this interest rate
c. through its policy of open market operations.
d. by altering the size of the federal budget deficit or surplus.
C
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Market equilibrium
i. can never occur because there are always people who want a good but cannot afford it. ii. occurs at the intersection of the supply and demand curves. iii. is the point where the price equals the quantity. A) ii and iii B) i only C) ii only D) i and ii E) iii only
All of the following are examples of nonprice rationing devices EXCEPT
A) price controls. B) queues. C) black markets. D) waiting lists.
If it is employing the rule of reason when considering an antitrust case, the court
a. considers why the offending practice was adopted and its effect on competition b. does not consider why the offending practice was adopted or its effect on competition c. ignores the economic rationale for the offending practice and its consequences d. needs only determine that the offending practice took place e. considers only whether the firm has market power, not whether it used that power unreasonably
Which of the following explains why managers of government agencies have little incentive to achieve operational efficiency?
What will be an ideal response?