The Federal Reserve has
A. no control or influence over any significant macroeconomic variables.
B. oversight on issues of the environment
C. indirect influence over macroeconomic variables, such as unemployment and inflation through the use of intermediate targets.
D. direct control over macroeconomic variables, such as unemployment and inflation.
Answer: C
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Advertising by monopolistically competitive firms can do all of the following EXCEPT
A) lower the consumer's purchase price. B) help differentiate a firm's product. C) act as a signal to consumers that the company is serious about staying in business. D) result in increased profits for the advertising firm.
Which of the following situations is a clear application of the benefits principle of taxation?
A. Wealthier people are taxed more heavily. B. Heavier vehicles are charged higher tolls on turnpikes. C. State government providing a free education to any child in the state. D. Sales of measles vaccine exempt from sales tax.
For this question, assume that exchange rates flexible and that the exchange rate expected to occur in one year is not constant. Suppose that individuals now expect that the domestic central bank will pursue expansionary monetary policy in one year. This expected future monetary expansion will cause which of the following to occur?
A) The current nominal exchange rate will decrease. B) The current nominal exchange rate will increase. C) The current nominal exchange rate will not change. D) The effects on the current nominal exchange rate are ambiguous.
Marginal cost describes a change in _________ when output is expanded by one more unit.
A) average total cost B) total cost C) average variable cost D) total fixed cost