Why did the Fed shift its policy target towards the federal funds rate
What will be an ideal response?
The demand for money became less stable over time as financial markets were deregulated and financial innovation took place. These changes made monetary aggregates less useful as a target for monetary policy.
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Assume that an association of young workers has lobbied Congress to require that all workers retire once they reach the age of fifty. What impact would this law have on the nation's production possibilities frontier?
A) no impact at all B) The level of unemployment would decrease so the production possibilities frontier would shift outward. C) The nation would move to a new position on its production possibilities frontier but the frontier itself would not shift. D) The production possibilities frontier would shift inward. E) The number of young workers would increase so the production possibilities frontier would shift outward.
In what ways have financial innovations affected the demand for money?
What will be an ideal response?
Q.E.
What will be an ideal response?
When the price and output decisions of one firm include the possible price and output reactions of the firm's rivals, the market is
A. a monopoly characterized by differentiated products. B. an oligopoly characterized by mutual interdependence. C. perfectly competitive characterized by collusion. D. monopolistically competitive characterized by nonprice competition.