One of the specific goals for central bankers is financial system stability. Considering the U.S., for example, would this imply that the Federal Reserve would always take action to prevent any single bank from failing? Explain.
What will be an ideal response?
Not likely. What the Fed would be concerned with is the financial system. For example, as we learned in the previous chapter, if the bank was in the category of too-big-to-fail, then yes, the Fed would likely take action to merge that bank into another one or take other steps to prevent a bank panic. On the other hand, if the bank was insolvent and small, the Fed may let the bank fail and not get that involved. What the Fed or any central banker is concerned with is to prevent a disaster that jeopardizes the functioning of the entire system.
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The supply curve of a good or service is the same as
A) the demand curve. B) the marginal benefit curve. C) the marginal cost curve. D) the total surplus curve. E) None of the above answers is correct.
In the Current Population Survey, a person is considered unemployed if the person
A) is without a job. B) is working anything less than 40 hours per week. C) is working without pay. D) does not have a job and is actively looking for a job. E) is working less than 20 hours per week.
Most economists support the idea of peak-load pricing on the grounds of
a. fairness in income distribution. b. efficiency in input usage. c. equality of opportunity. d. efficiency in output allocation.
If a good is inferior, then an increase in income will cause the demand curve to
A. shift left. B. stay the same. C. shift right. D. rotate inward.