The FOMC targets the federal funds rate, but if they are going to alter the course of the economy they must influence the:
A. real interest rate as well.
B. real exchange rate as well.
C. long-term nominal interest rate as well.
D. nominal exchange rate as well.
Answer: A
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A tax is progressive if the ratio of taxes to income rises as income rises.
Answer the following statement true (T) or false (F)
Which of the following is inconsistent with a monopoly?
a. a single seller b. a downward-sloping demand curve c. marginal revenue exceeds price d. a U-shaped average total cost curve
Assume the government decides to reduce spending in order to reduce the budget deficit, which it financed by borrowing in the real credit market. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real goods market with aggregate demand shifting to the left. b. Start the analysis in the real goods market with aggregate demand shifting to the right. c. Start the analysis in the real goods market with aggregate supply shifting to the left. d. Start the analysis in the real goods market with aggregate supply shifting to the right. e. Start the analysis in the real credit market with demand for real credit shifting to the left.
If it is assumed that people vote for the candidate who comes closer to matching their own views, then
A) candidates will label themselves as right-wingers. B) candidates will label themselves as left-wingers. C) candidates will label their opponents as middle-of-the-roaders. D) candidates will discuss the means to accomplishing ends. E) a candidate who is trailing in the polls will modify his or her position to become more like his or her opponent.