Which of the following are policy instruments available to the Fed as it tries to achieve its macroeconomic goals?
i. government expenditure on goods and services and taxes
ii. the government budget deficit or surplus
iii. changes in the federal funds rate
A) iii only B) ii and iii C) ii only D) i and ii E) i and iii
A
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In a centrally planned economy, the concept of marginal cost
A) is important if planners want to achieve their objectives at the lowest possible cost. B) is irrelevant because resources can be obtained by government decree. C) is irrelevant because socialist firms do not have to earn profits. D) is irrelevant if industries can be subsidized.
If a country has a large deficit in its current account
A) it has a large surplus in its financial account. B) it exports more than it imports. C) it is a net creditor to the rest of the world. D) None of the above are necessarily true.