The strongest argument for an independent Federal Reserve rests on the view that subjecting the Fed to more political pressures would impart
A) an inflationary bias to monetary policy.
B) a deflationary bias to monetary policy.
C) a disinflationary bias to monetary policy.
D) a countercyclical bias to monetary policy.
A
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The benefit of holding money is ________, while the opportunity cost of holding money is ________.
A. its usefulness in carrying out transactions; the nominal interest rate B. increased income; lost purchasing power C. the nominal interest rate; the fees charged by banks D. the nominal interest rate; its usefulness in carrying out transactions
One plausible explanation of the U.S. productivity slowdown starting in 1973 is that it was the result of the time needed to adapt to new technology. This explanation would require that
A) workers withdraw from the labor force to learn about the new technology. B) a large number of new entrants be attracted to the labor force. C) managers be reluctant to adopt changes. D) workers time at their jobs be diverted from production to learning the technology.
Adverse selection in insurance requires that
a. all people face the same risk b. potential customers facing more risk are no more interested in purchasing insurance c. people are risk averse d. insurers can tell higher risk people from lower risk people
If the marginal propensity to save is 0.4 and disposable income decreases from $2,000 to $1,000, saving will
A. decrease by $400. B. decrease by $80. C. increase by $80 D. increase by $400.