Give an example of a monetary policy target. Explain why the Fed uses policy targets
What will be an ideal response?
One possible monetary target is the money supply. Another possible target is the interest rate. (Either answer is correct). A monetary policy target is an economic variable that the Fed can affect directly. The Fed uses monetary targets because it cannot directly manipulate and change monetary policy goals such as high employment, economic growth, and price stability. The Fed can affect the targets directly and they in turn affect the variables such as real GDP and the price level, which are closely related to the Fed's policy goals.
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Jessica is a young doctor who has just started her own practice. Her previous position paid her $80,000 a year. For office space, she uses a building which she owns and which she has rented in the past for $40,000 a year
Her total revenue from her new practice is $250,000. She pays $50,000 to other firms for materials and supplies, and she pays $40,000 in wages to her office nurse. Assume that Jessica's building and equipment do not depreciate and that her normal profit is $20,000. a) What is the opportunity cost of all factors of production employed by Jessica? b) What is Jessica's economic profit?
For a monopolistic competitive firm, which of the following is TRUE in the long run?
A) ATC is minimized. B) Economic profit is zero. C) P = MC. D) all of the above
During a recession the economy experiences
a. rising employment and income. b. rising employment and falling income. c. rising income and falling employment. d. falling employment and income.
Which of the following is NOT an example of technological progress?
A. builders constructing a new office building that uses less energy B. an increase in Florida's orange crop resulting from a mild winter C. the invention of wireless internet access D. the development of bluetooth headsets