"The Federal Open Market Committee (FOMC) is the group within the Federal Reserve that makes monetary policy decisions. The FOMC meets twice a year and each meeting lasts eight days." Are these two statements correct or incorrect? Why?
What will be an ideal response?
The first statement is correct. The second statement is incorrect. It is indeed the case that the FOMC is the group within the Fed that makes monetary policy decisions. However the FOMC meets eight times a year, not twice. Of these eight meetings, six are for one day and two of the meetings last for two days.
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Which of the following are short-term financial instruments?
A) a repurchase agreement B) a share of Walt Disney Corporation stock C) a Treasury note with a maturity of four years D) a residential mortgage
Suppose 10% of all workers are of high ability. If a firm knows a worker's ability, workers of low ability are paid $20,000 and workers of high ability are paid $30,000. A college degree can signal ability, and the cost of the degree is $11,000. Will there be a pooling equilibrium or a separating equilibrium?
What will be an ideal response?