What actions should the Fed take if it believes the economy is about to fall into recession?
What will be an ideal response?
If the Fed believes the economy is about to fall into recession, it should conduct expansionary monetary policy, increasing the money supply and reducing interest rates. In implementing expansionary monetary policy, the Fed could lower the discount rate, lower the reserve requirement, and/or have the trading desk purchase U.S. Treasury securities.
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What will a U.S. corporation do if it believes that the dollar will continue to appreciate when it changes foreign earnings back into dollars?
What will be an ideal response?
A simple two-sector circular flow diagram illustrates the flow of resources between: a. the rest of the world and firms. b. government and firms
c. households and government. d. households and firms.
Jen's wage decreased, and she responded by enjoying more hours of leisure per day. Is Jen's behavior consistent with an upward-sloping labor-supply curve?
The beginning of the formal budget process is signified by:
a. in the form of the Economic Report of the President
b. in a report followed shortly by the Economic Report of the President.
c. at the beginning of the fiscal year.
d. in a report that should be voted up or down within 60 days.
e. in a report that requires a two-thirds vote for ratification.