Is the Federal Reserve an independent institution?
What will be an ideal response?
The Federal Reserve is generally considered to be independent of control by the U.S. Congress and the U.S. President. Although it was created by Congress and can be eliminated by Congress, any change in its role and mission will require extensive legislative action, which is unlikely to occur. The President also has no direct control over the operation of the Federal Reserve, other than lobbying influence and the power to appoint members of the Board of Governors. These members, however, are appointed to long terms -- fourteen years which gives them protection from immediate political pressures. The long terms also reduce the possibility for any one President from packing the Board.
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Exclusion by the BLS of which of the following tends to understate the measure of unemployment in the economy?
a. children b. retired persons c. students d. people who do not want to work e. discouraged workers
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower