The Federal Reserve System:
A. has the same status as the Supreme Court.
B. is basically an independent agency.
C. has the status of a congressional committee.
D. is an agency of the executive branch of the federal government.
B. is basically an independent agency
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Excessive regulation may lead to
a. corruption b. attempts to evade regulations c. high costs of complying with regulation d. lobbying to remove regulation e. all of the above
Diseconomies of scale refers to when in the long run:
A. average total cost does not depend on the quantity of output. B. an increase in the quantity of output increases average total cost. C. an increase in the quantity of output decreases average total cost. D. None of these is true.
When the Fed lends money to a commercial bank, the bank:
A. increases its reserves and enhances its ability to extend credit to bank customers. B. decreases its reserves and reduces its ability to extend credit to bank customers. C. pays the federal funds interest rate on the loan. D. pays the prime interest rate on the loan.
In competing with rivals, monopolistic firms will tend to use:
A. Price cuts because they do not add to costs like advertising B. Advertising because it is less easily duplicated than price cuts C. Collusion because it is a legal way to increase market share D. Price wars because they will increase the profits of firms