Monetary policy is conducted by the U.S. Treasury Department
Indicate whether the statement is true or false
FALSE
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Which of the following is likely to happen when the Fed raises the federal funds rate?
A) The long-run interest rate will fall. B) The labor demand curve shifts to the left. C) The volume of economic activity will increase. D) The labor demand curve shifts to the right.
Suppose that data for a particular economy over time suggest that its aggregate demand curve is both steep and shifts frequently. We might reasonably infer that ________
A) the central bank has an activist emphasis on the stability of economic activity B) wages and prices are remarkably flexible C) policy lags are quite long D) all of the above E) none of the above
Suppose a roll of paper towels costs $5 at Sam's Quick Stop, a local quick stop, and the same roll of paper towels costs $2 at Big Supplies, a large, retailer located in a more remote location. If a customer's total cost of travel to Sam's Quick Stop is $3 and is $6 to Big Supplies, which of the following is true?
A) It is more expensive for the consumer to buy the paper towels at Big Supplies. B) It is cheaper for the consumer to buy the paper towels at Sam's Quick Stop. C) It is cheaper for the consumer to buy the paper towels at Big Supplies. D) The consumer is indifferent as to where they buy the paper towels.
The discount rate is the interest rate:
a. commercial banks charge their low-risk customers for a loan. b. savings and loan associations pay for using savings deposit funds. c. the U.S. Treasury pays individuals who buy Treasury bonds in denominations of $10,000 or more. d. the Federal Reserve charges banking institutions for borrowing its funds.