Which of the following is a role played by the Fed in the U.S. economy?
A) It acts as a lender of the last resort in case of bank runs.
B) It determines the import duty on raw materials being imported into the country.
C) It acts as a direct source of funds for new businesses and startups.
D) It takes political decisions during periods of recessions.
A
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When the Phillips curve was viewed as a structural relationship, it was believed that the Fed could
A) permanently reduce the unemployment rate if it were willing to accept an increase in the inflation rate. B) permanently reduce the inflation rate as it permanently reduced the unemployment rate. C) permanently reduce the unemployment rate if it were willing to increase the real interest rate. D) permanently reduce the inflation rate if it were willing to decrease the real interest rate.
In the neoclassical growth model, if two countries are exactly the same but one has a lower depreciation rate, we would expect that country to have
a. higher output, a higher capital-to-labor ratio, and the same per capita output growth in the steady state. b. higher output, a higher capital-to-labor ratio, and higher per capita output growth in the steady state. c. the same output and capital-to-labor ratio, but higher per capita output growth in the steady state. d. higher output, the same capital-to-labor ratio, and the same per capita output growth in the steady state.
Special interests are _____ on political issues where they may receive concentrated benefits
a. stable b. cyclical c. rationally ignorant d. not rationally ignorant
If the aggregate price level ________, but nominal wages stay fixed, labor demand ________
A) falls; remains unchanged B) rises; falls C) rises; remains unchanged D) falls; falls