Why does the Fed have imperfect control over the money supply?
a. Because the Fed does not know how much reserves will change when it buys or sells securities.
b. Because of unpredictable changes in the public's desire to hold cash and banks' desires to hold reserves.
c. Because of unpredictable changes in reserve requirements.
d. Because of the secrecy of FOMC meetings, which lead to policy surprises.
b
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Arnie's Airlines is a monopoly airline that is able to price discriminate. If Arnie's decides to price discriminate, then
A) Arnie's profit increases. B) consumer surplus increases. C) Arnie's revenues decrease. D) Arnie's sells fewer tickets. E) Arnie can no longer set a price that depends upon the buyer's willingness to pay.
Which of the following is not a public good?
A. A coastal lighthouse B. National defense C. A flood-control levee D. The latest Walt Disney movie