Describe the structure of the Fed's Open Market Committee (FOMC). What is this committee's primary responsibility?
What will be an ideal response?
The FOMC is comprised of the seven members of the Board of Governors in Washington, D.C., the President of the Federal Reserve Bank of New York, and four Presidents (serving one-year rotating terms) from the remaining eleven district banks. This committee assumes primary responsibility for managing the U.S. money supply.
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Economic efficiency entails
A) producing a given amount of output with the most expensive mix of inputs. B) producing a given amount of output with the least number of inputs. C) producing a given amount of output with the most inputs. D) producing a given amount of output with the cheapest mix of inputs.
According to the following figure, the equation for demand is
A. Q = 4,000 - 50P. B. Q = 50 - 80P. C. P = 4,000 - 50Q. D. P = 4,000 - 80Q. E. none of the above
During the 1970s and 1980s, macroeconomists were busy integrating the insights of which of the following into their ideas about the economy?
A) real business cycle theory B) Keynesian theory C) supply side economics D) classical macroeconomics E) none of the above
The direct effect of an increase in the money supply is
A. people will save the money, causing an increase in bank deposits, causing interest rates to fall, and loans to expand. B. people will spend the extra money, causing the aggregate demand curve to shift to the right and prices to rise, and causing the economy to go into recession. C. people will save more money, causing a decrease in economic activity and a fall in prices. D. people will spend the extra money, causing the aggregate demand curve to shift to the right, creating an increase in economic activity.