Which of the following is not true about the Federal Reserve banks?
A. They serve as bankers' banks.
B. They compete with commercial banks in their basic functions.
C. Unlike other banks, they are not motivated by profits.
D. They are privately owned but government-controlled.
Answer: B
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________ can trigger a recession
A) A decrease in autonomous expenditure B) An increase in autonomous expenditure C) An increase in induced expenditure D) Equality between aggregate expenditure and real GDP E) An increase in the expenditure multiplier
What happens to the Canadian monetary base if there is an excess supply of 100 million euros in the foreign exchange market, which the Bank of Canada purchases?
a. The Canadian monetary base falls by 100 million euros worth of Canadian dollars. b. The Canadian monetary base falls. The amount depends on the size of the money multiplier c. The Canadian monetary base might fall or rise. d. The Canadian monetary base rises by 100 million euros worth of Canadian dollars. e. The Canadian monetary base rises. The amount depends on the size of the money multiplier.
If the equilibrium level of real Gross Domestic Product (GDP) is greater than the full-employment real Gross Domestic Product (GDP) consistent with the position of the economy's long-run aggregate supply (LRAS) curve, then the difference between full-employment real Gross Domestic Product (GDP) and current equilibrium real Gross Domestic Product (GDP) is
A. an inflationary gap. B. the level of output consistent with natural unemployment. C. a recessionary gap. D. an aggregate demand shock.
All of the following are assumptions of both market and public-sector decision making EXCEPT
A) Decisions are based on majority rule. B) Decisions are motivated by individuals' self-interest. C) Opportunity costs exist in decisions. D) Choices reflect incentives faced by decision makers.