Using the traditional tools of monetary policy, the Federal Reserve has direct control over ________ and through that an ability to impact ________.
A. monetary base; short-term interest rates
B. long-term interest rates; mortgage rates
C. unemployment; inflation
D. mortgage rates; real GDP
Answer: A
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A stable regular relation between income and the money stock as the medium of exchange presumes that
A) no interest is paid on the medium of exchange. B) as interest rates increase the amount of money held increases. C) as interest rates increase the amount of the medium of exchange held decreases. D) A and B.
You operate a factory that produces beach towels. Your current level of output equals 2,000 towels per week. Your weekly variable cost equals $8,000 . If your total cost each week equals $9,000 . it follows that:
a. the average variable cost of production equals $2 per towel. b. the average variable cost of production equals $4 per towel. c. the average total cost of production equals $8 per towel. d. none of the above
In the United States, measured wealth is distributed more unequally than income
Indicate whether the statement is true or false
When the economy is hit by a negative demand shock and the central bank does not respond by changing the autonomous component of monetary policy, then
A) inflation will be lower. B) output will be at its potential. C) output will be lower. D) inflation will not change. E) both A and B.