Which of the following is correct?
A. The Fed has very good control over the money supply and bank reserves.
B. The Fed has very poor control over the money supply and bank reserves.
C. The Fed has very good control over bank reserves but not over the money supply.
D. The Fed has very good control over the money supply but not over bank reserves.
Answer: C
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Taxes and transfer payments automatically reduce fluctuations in real GDP and thereby stabilize the economy without any need for decisions from Congress or the White House
Indicate whether the statement is true or false
The interest rate:
A. is the price of borrowing money for a specified period of time. B. is expressed as a percentage per dollar borrowed and per unit of time. C. determines the total amount that must be paid back on a loan. D. All of these are true.
When more and more units of a variable factor are combined with constant amount of a fixed factor, such that the variable factor becomes abundant compared to the fixed factor, the output will eventually:
a. increase at an increasing rate. b. increase at a diminishing rate. c. increase at a constant rate. d. become constant. e. fall to zero.
In theory, placing a price control on a natural monopoly should:
A. reduce deadweight loss to zero. B. create negative economic profits for the company. C. be easy for government to figure out because of easily accessible information. D. have the same outcome as public ownership.