The federal funds rate is
A. The required reserve ratio that the federal reserve requires banks to maintain
B. The interest rate that banks charge for loans to its important commercial borrowers
C. The interest rate that banks charge each other for overnight loans
Ans: C. The interest rate that banks charge each other for overnight loans
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A decrease in wealth would shift the:
A) aggregate demand curve rightward. B) aggregate demand curve leftward. C) aggregate supply curve rightward. D) aggregate supply curve leftward.
In the 1960s, the monetarist school of thought held that
A) monetary and fiscal policy could explain most of the output fluctuations in U.S. history. B) there is a long-run tradeoff between inflation and unemployment. C) efforts to fine-tune the economy are likely to do more harm than good. D) all of the above E) none of the above