If the current price is above the equilibrium price, we would expect:
A) quantity demanded to exceed quantity supplied.
B) upward pressure on price.
C) quantity supplied to exceed quantity demanded.
D) no change in the market price.
Answer: C) quantity supplied to exceed quantity demanded.
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Which of the following describes the degree of control that the Fed has over the money supply?
A) The Fed has substantial control over the money supply. B) The Fed has absolute control over the money supply. C) The Fed has no control of the money supply. D) The Fed is not concerned about the level of the money supply, and does not attempt to control it.
How can the Fed reduce the implicit tax on banks resulting from reserve requirements?
A) lowering the discount rate B) paying interest on reserves C) reducing the federal funds rate D) increasing the federal funds rate
What is the length of a term for the Chairman of the Board of Governors?
A) one year B) four years C) 14 years D) 28 years
From the classical perspective, an increase in unemployment during a recession represents
A) voluntary unemployment. B) a roughly equal mix of voluntary and involuntary unemployment. C) involuntary unemployment. D) a decrease in the number of discouraged workers in an economy.