Answer the following questions true (T) or false (F)
1. The relationship between GDP and the money supply has gotten stronger since the 1980s.
2. The Fed has adopted an interest rate target for most of the time since World War II.
3. Inflation targeting allows monetary policy to focus on inflation and inflation forecasts except during times of severe recession.
1. FALSE
2. TRUE
3. TRUE
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One reason for the fall in the natural rate of unemployment from 1980 to 2000 is
A) changes in the demographic composition of the work force. B) the decline in inflation. C) increased competition from foreign workers. D) the depreciation of the dollar relative to foreign currencies.
Which of the following statements about the FDIC is untrue?
a. The FDIC conducts bank audits and examinations. b. The FDIC helps prevent bank failures. c. The FDIC is owned by member banks. d. The FDIC provides demand deposit insurance for participating banks. e. The FDIC was created in 1933.
Figure 3-17
Refer to . Area C represents
a.
the decrease in consumer surplus that results from a downward-sloping demand curve.
b.
consumer surplus to new consumers who enter the market when the price falls from P2 to P1.
c.
the increase in producer surplus when quantity sold increases from Q2 to Q1.
d.
the decrease in consumer surplus to each consumer in the market when the price increases from P1 to P2.
v
If a perfectly competitive firm is a price taker, then which of the following is true?
a. Pressure from competing firms will force acceptance of the prevailing market price. b. The firm must be a relatively small player compared to its competitors in the overall market. c. The firm can increase or decrease its output without affecting the overall quantity supplied in the market. d. Quality differences will be very perceptible and will play a major role in purchasers' decisions.