Which of the following is one of the main goals of monetary policy?
A. Transferring wealth from lenders to borrowers
B. Rescuing bankrupt private businesses
C. Smoothing out the business cycle
D. Producing deflation
Answer: C
You might also like to view...
Money serves as all of the following EXCEPT
A) a medium of exchange. B) a unit of account. C) a store of value. D) a symbol that is made of or can be redeemed for a fixed amount of precious metal. E) a highly liquid asset.
Congress created the Federal Deposit Insurance Corporation to
a. sell insurance to individuals who have bank accounts b. inject reserves into the economy more quickly c. develop a better working relationship between bank managers and government officials d. charge higher interest rates to banks e. reimburse those who lose their bank deposits
Free markets can
A. produce goods and services with maximum efficiency. B. permanently solve unemployment. C. completely protect the environment. D. All of these responses are correct.
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. John should:
A. not expand, because there is a chance John will earn the same as if he didn't expand and would be out the $150,000 investment. B. expand, since he expects to earn $320,000 by expanding, and it will only cost him $150,000 to do so. C. not expand, since he expects to earn $120,000 more by expanding than not, and it will cost him $150,000 to do so. D. expand, since he has a 70 percent chance of earning more than the cost of expansion.