Which of the following statements is true?
A. The Federal Reserve sets the federal funds rate.
B. The Federal Reserve sets the target for the federal funds rate, and then uses the reserve
ratio to push banks toward that target.
C. The Federal Reserve does not set the federal funds rate, but it influences it through the
use of its open-market operations.
D. The Federal Reserve will set a higher target for the federal funds rate if pursuing an
expansionary monetary policy.
C. The Federal Reserve does not set the federal funds rate, but it influences it through the
use of its open-market operations
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In the figure above, if the firm is regulated using an average cost pricing rule, the deadweight loss created is equal to the area of
A) ABG. B) BEFG. C) BCFG. D) BCE. E) None of the above because there is no deadweight loss created.
Explain why member firms of a cartel like OPEC have incentives to agree to a low cartel production level and then produce more than its quota
What will be an ideal response?