The main function of the Federal Reserve System is to:
A. Serve as the fiscal agent for the Federal government
B. Set reserve requirements of banks
C. Clear checks from member banks
A. Serve as the fiscal agent for the Federal government
B. Set reserve requirements of banks
C. Clear checks from member banks
D. Control the money supply
D. Control the money supply
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The level of output (real GDP) that equals aggregate expenditure is called the ________ level of real GDP.
A. induced B. potential C. natural rate D. equilibrium
Which of the following would shift the supply curve to the right?
A) A rise in the expected future price of the good B) A rise in the costs of producing the good C) Fewer producers in the industry D) All of the above. E) None of the above.
If the ________ of a forecast outweighs its ________, the forecast can ________ a firm's profit.
A) cost; benefit; double B) cost; benefit; increase C) benefit; cost; increase D) benefit; cost; decrease
The direct impact on spending of short-term interest rate changes by central banks is:
A. not that powerful. B. only effective for net exports but not for investment and consumption. C. definitely the strongest of all transmission mechanisms. D. only effective for consumption but not investment.