The Federal Reserve ___
a. oversees the US banking system
b. determines the size of M1 and M2 and sets US interest rates
c. is the central bank of the US
d. all
Answer: d. all
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Can nominal GDP ever be less than real GDP?
What will be an ideal response?
The figure above shows the situation facing Smart Digit, Inc, a firm in monopolistic competition that produces calculators. The firm's economic profit in the long run is
A) zero. B) $600. C) $900. D) $2,400.
Suppose the U.S. GDP growth rate is faster relative to other countries' GDP growth rates. This will
A) shift the aggregate demand curve to the left. B) move the economy up along a stationary aggregate demand curve. C) shift the aggregate demand curve to the right. D) move the economy down along a stationary aggregate demand curve.
When the average price level in the United States, relative to the average price levels in other countries, rises, this tends to
A. raise imports and exports. B. lower imports and exports. C. raise imports and lower exports. D. lower imports and raise exports.