How well did the Federal Reserve Banks perform during the Great Depression?
(A) The Chair of the Board of Governors made bad decisions and directed the Federal Reserve Banks to act in harmful ways.
(B) The Federal Reserve System skillfully guided the United States economy out of the Great Depression.
(C) Individual governors of the Federal Reserve Banks disagreed over policy and were unable to stop the depression.
(D) The Great Depression took place before the Federal Reserve System was established.
Answer: (C) Individual governors of the Federal Reserve Banks disagreed over policy and were unable to stop the depression.
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The figure above represents the behavior of total revenue as price falls along a straight-line demand curve. What is the price elasticity of demand if total revenue is given by point f?
A) Demand is inelastic. B) Demand is unit elastic. C) Demand is elastic. D) It is impossible to determine.
Assume that the income effect dominates the substitution effect. When workers experience a ________ price surprise, they ________ perceive that their real wage rate has ________, which leads them to work fewer hours.
A. negative; incorrectly; risen B. negative; correctly; fallen C. positive; correctly; risen D. positive; incorrectly; risen