Monetary policy refers to the actions the
A) President and Congress take to manage the money supply and interest rates to pursue their economic objectives.
B) Federal Reserve takes to manage the money supply and interest rates to pursue its macroeconomic policy objectives.
C) President and Congress take to manage government spending and taxes to pursue their economic objectives.
D) Federal Reserve takes to manage government spending and taxes to pursue its economic objectives.
Answer: B
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Suppose that there are 10 firms in an industry, each accounting for 10 percent of industry sales. Two of these firms decide to merge. Which of the following statements about the impact of this merger is (are) INCORRECT?
A) The merger causes the four-firm concentration ratio to increase from 40 to 50. B) The merger causes the HHI to increase by 100. C) The merger will not change the HHI unless the industry's sales increase. D) Both answers A and C are incorrect.
Firms in a small economy planned that inventories would grow over the past year by $300,000. Over that year, inventories actually grew by $400,000. This implies that
A) aggregate expenditure that year was less than GDP that year. B) aggregate expenditure that year was equal to GDP that year. C) there was a planned decrease in inventories that year. D) there was an unplanned decrease in inventories that year.
Based on the following information, what is the balance on the current account?
Exports of goods and services = $12 billion
Imports of goods and services= $14 billion
Net income on investments = -$4 billion
Net transfers = -$1 billion
Increase in foreign holdings of assets in the United States = $6 billion
Increase in U.S. holdings of assets in foreign countries = -$3 billion
A) -$7 Billion
B) -$3 billion
C) -$2 billion
D $1 billion
If the graph shown represents Celia's budget constraint, which of the following must be true?
A. Celia gets twice as much utility from earrings as she does from hairbands. B. Celia will spend twice as much on earrings as she does hairbands. C. Celia could consume either four pairs of earrings or eight hairbands. D. All of these are true.