Which of the following is true about the Federal Reserve and its ability to prevent recessions? The Federal Reserve
A) can fine tune the economy and realistically hope to keep the economy from experiencing recessions.
B) cannot realistically fine tune the economy and has little to no effect on the magnitude and length of recessions.
C) does not try to eliminate recessions, but instead focuses on preventing inflation.
D) cannot realistically fine tune the economy, but seeks to keep recessions shorter and milder than they would otherwise be.
D
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A binding price ceiling is: a. set with the aim of increasing the consumer surplus. b. set at the equilibrium price level
c. set below the equilibrium price level. d. set above the equilibrium price level.
The coupon rate is the
A. regular payment of interest to a bondholder. B. interest rate promised when a bond is issued. C. maximum interest rate that can be paid on a bond. D. amount originally lent.
Suppose the own price elasticity of demand for good X is ?0.25, and the quantity of good X increases by 5 percent. What would you expect to happen to the total expenditures on good X?
A. Remain unchanged B. Decrease C. Increase D. Neither increase, decrease nor remain unchanged
The elasticity of demand for employees is -0.50. It is also estimated that the existing minimum wage (price floor) has increased the raise the wage by 25% above equilibrium wage. How much would the employment change if the price floor was eliminated?
A) Employment would decrease by 12.5%. B) Employment would increase by 12.5%. C) Employment would decrease by 25%. D) Employment would increase by 25%.