Briefly discuss the organization of the Federal Reserve. Include in your answer a discussion of the individuals/groups who make decisions about monetary policy
What will be an ideal response?
In terms of the structure of the Fed, answers should mention the 12 district banks (and their presidents), the Board of Governors, the FOMC, and, possibly, the open market desk in New York. In terms of the individuals, answers should include a discussion of the 7 governors (with 14-year terms) and the chair with a renewable 4-year term. The role that district presidents play on the FOMC should also be noted.
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Hospitals typically include all their sunk costs when deciding how much it costs them to provide services because
A) each patient benefits from the hospital's being adequately equipped. B) hospital administrators have no incentive to be efficient. C) no hospital could continue operating if it wasn't able to cover its sunk costs. D) the payments they receive are largely based on what they say are their costs. E) they are non-profit institutions and hence are in general poorly managed.
Red Stone Creamery currently hires 5 workers. When it added a 6th worker, its output actually fell. Which of the following statements is true?
A) The total product becomes negative. B) The average product of the sixth worker is negative. C) The sixth worker is not as skilled as the fifth worker. D) The marginal product of the sixth worker must be negative.
The real-income effect is typically small because
A. the change in price of one particular item has little effect on total purchasing power. B. income has no relation to consumption. C. real-incomes are always rising. D. price changes tend to balance out over time.
The ________ helps illustrate the competitive forces that determine the level of competition and profitability in an industry.
A. concentration ratio B. Five Forces Model C. Cournot Model D. Contestable Market Model