Does the Federal Reserve operate like an ordinary commercial bank? What is the Fed's job?
Since the Fed is an independent branch of the government, it does not operate for profit. The Fed is also the only bank that can legally issue money-the Federal Reserve notes ($1 bills, $5 bills, etc.) that we carry around in our pockets. Finally, the Fed acts as a banker's bank. Most banks hold deposits at the Fed and occasionally borrow money from the Fed. The Fed also oversees the clearing of checks through the banking system.
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When a tariff supporter argues that foreign producers are selling their products for prices below the costs of production, which of the following is being used?
A) Save domestic jobs argument B) National security argument C) Dumping argument D) Infant-industry argument E) Diversity and stability argument
Consider the following hypothetical scenarios:
Scenario A: You are about to purchase a pair of 7 for All Mankind jeans for $175 and a t-shirt for $45. The sales attendant at the store tells you that the pair of jeans you wish to buy is on sale for $160 at another store, located about a 20-minute drive away. Scenario B: You are about to purchase a pair of 7 for All Mankind jeans for $175 and a t-shirt for $45. The sales attendant at the store tells you that the t-shirt you wish to buy is on sale for $30 at another store, located about a 20-minute drive away. Based on standard economic theory, under which scenario would you make the 20-minute trip to the other store? A) Scenario A because the pair of jeans is a very expensive item and $15 saving is quite substantial B) Scenario B because a $15 saving amounts to a substantial discount (about 33 percent) C) in either scenario if I think a $15 savings is worth the 20-minute trip D) in none of these scenarios if I think the $15 saving is not worth the 20-minute trip E) C and D are correct answers.