Both the Federal Reserve System in the United States and the European Central Bank are comprised of geographically dispersed Banks. How might such decentralization contribute to successful monetary policy?
What will be an ideal response?
The economies of both the U.S. and Europe encompass many regions with distinct economic specializations, income levels, demographics, etc. Policymakers need to be aware of this heterogeneity and of how the policies under consideration might impact some regions differently than others. Having had a role in the design and selection of policies, officials and citizens at the regional level will be more willing and able to support and to implement the policies.
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Which type of policy raises the most revenue for the government?
A) tariff B) quota C) voluntary export restraints D) If they are set at the same level, all of the above raise the same amount of revenue. E) None of the above answers is correct because none of the policies raises revenue for the government.
Which of the following correctly describes a shortage? Question 4 options:
A. Some buyers are unable to buy as much as they want at the current price. B. The quantity demanded equals the quantity supplied but the price is less than the equilibrium price. C. The quantity demanded equals the quantity supplied but the price is higher than the equilibrium price. D. The quantity demanded is less than the quantity supplied. E. Some sellers are unable to sell all they want to at the current price.
When a monopolist sells two units of output its total revenue is $600. When a monopolist sells three units of output its total revenue is $690. In order to sell three units of output instead of only two, the monopolist must
A. decrease its price by $70 per unit. B. decrease its price by $30 per unit. C. decrease its price by $90 per unit. D. make no change in price and increase output by one unit.
Which of the two features of the IMF Articles of Agreement helped promote flexibility in external adjustment?
A) IMF members helped countries maintain full employment. B) IMF allowed countries to attain internal balance. C) New countries would enter the agreement if they fixed their exchange rate. D) IMF members contributed their currency to form a pool of resources that IMF could lend to countries in need and parities in the exchange rate against the dollar could be adjusted with agreement of IMF. E) IMF members argued against the use of floating exchange rates.