The Federal Reserve System is a(n)
a. corporation owned by its member banks.
b. independent branch of the U.S. government.
c. corporation owned by the government and member banks.
d. agency created by presidential executive order.
a
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Suppose that the U.S. interest rate is 5 percent and the Japanese interest rate is 1 percent. The effect of this difference in the foreign exchange market is that
A) financial capital stops moving. B) a Japanese investor is guaranteed to make an additional 4 percent in yen terms by investing in the United States. C) investors expect the yen to appreciate against the dollar. D) investors expect the yen to depreciate against the dollar.
In the above figure, suppose the quantity produced is 40. Then
A) the marginal social cost of the 40th unit is $1. B) the willingness to pay for the 40th unit is $2, the equilibrium price. C) production is not efficient because MSB > MSC. D) production is not efficient because MSC>MSB.