What does the Fed auction at the Term-Auction Facility?
a. government bonds of a quantity it sets
b. government bonds with the quantity determined at the auction
c. loans of a quantity it sets
d. loans with the quantity determined at the auction
c
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Which of the following criteria should be used to evaluate if government intervention in a market for the purpose of environmental protection is justified?
A) Is the intervention program economically efficient? B) Does the intervention program reduce pollution to zero? C) Does the intervention program maximize economic surplus? D) Does the intervention program minimize environmental damage?
The problem of lags suggests that monetary policy should
A) respond swiftly to statistical reports of economic conditions in the recent past. B) respond to conditions expected to exist in the future. C) stagger its implementation of policies so that there will be an ongoing effect on the economy. D) not respond to changing economic conditions in the economy but instead rely on the economy's self correcting mechanism.