By law what goals are the Federal Reserve to pursue? What, if any, specific weights are given for these goals?
maximum employment, stable prices, and moderate long-term interest rates
They are not given specific weights.
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Consider the following T-account for National City Bank:
Assets Liabilities Reserves $10,000 Deposits $100,000 Loans $90,000 If the required reserve ratio is lowered to 8 percent, how much can National City loan out? A) $10,000 B) $8,000 C) $2,000 D) $0
Since classical economists and monetarists believe that the economy operates at full employment, real GDP, that is, along the vertical segment of aggregate supply,
a. any increase in the money supply can only end up raising the price level b. any increase in the money supply can only end up lowering the price level c. any decrease in the money supply can only end up raising the price level d. changes in the money supply will not affect the price level e. any increase in the money supply will cause both nominal and real GDP to increase
Markets in which the behavior of the firms theoretically leads to an efficient allocation of resources that maximizes the benefits to consumers given the resources available to consumers are
A. monopolistic competition and oligopoly. B. monopoly and oligopoly. C. monopolistic competition and monopoly. D. perfect competition and perfectly contestable.
Table 5.2National Income Accounts (dollar figures are in billions)Expenditures for consumer goods and services$2,850Exports$300Government purchases of goods and services$810Social Security taxes$295Net investment$510Indirect business taxes$445Imports$450Gross investment$700Corporate income taxes$190Personal income taxes$875Corporate retained earnings$210Net foreign factor income$0Government transfer payments to households$780Net interest payments to households$20On the basis of Table 5.2, depreciation is
A. $190 billion. B. $425 billion. C. $125 billion. D. -$125 billion.