The gross domestic product provides an estimate of society's evaluation of the relative worth of goods and services because it:
A. includes all income created by a nation's citizens, home or abroad.
B. is a monetary measure.
C. takes into account the value of security transactions.
D. excludes public and private transfer payments.
Answer: B
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The Fed tends not to use discount policy as its principal tool in influencing the money supply since
A) discount loans do not affect the money supply. B) it does not have as much control over discount loans as it has on open market operations. C) it is prohibited from doing so by an act of Congress. D) it prefers to use reserve requirements.
Points on the same utility curve are
A. points where the person is indifferent between bundles on the line. B. points where utility is maximized. C. never possible. D. known as "points of light."
The foreign exchange system that has the highest foreign exchange risk is
A) the dirty floating exchange rate. B) the fixed exchange rate. C) the floating exchange rate. D) the Bretton Woods system.
Monetary policy will be effective in changing the gross domestic product of a nation only if: a. planned investment expenditures are autonomous
b. planned investment expenditures are sensitive to interest rates. c. interest rates are unresponsive to changes in money supply. d. interest rates are sensitive to changes in the price level. e. planned investment expenditures are sensitive to interest rates.