The Fed's communication:
A. is irrelevant, all that matters is the actions that it takes.
B. is often used as a distraction to hide its true agenda.
C. is itself an important tool of monetary policy.
D. is the single most important tool of fiscal policy.
Ans: C. is itself an important tool of monetary policy.
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One weakness of the Sherman Act is that
A) it fails to clearly define restraint of trade. B) it applies only to foreign monopolies. C) it applies only to the steel and railroad industries. D) none of the above.
Assume that a GDP gap can be closed by a $200 initial change in planned spending. The MPS is 0.3 and the MPI equals 0.1 . If the economy is currently in equilibrium with an income level of $600, potential GDP equals:
a. $1,600. b. $1,100. c. $800. d. $600. e. $400.