Which of the following explains why the monetary policy implementation lag is relatively short?
I. The FOMC meets several times a year and policymakers are easily able to confer in between meetings.
II. Open market operations, one of the Fed's policy instruments can be put into effect immediately.
III. The Chairman of the Fed works in close collaboration with the President.
IV. Most financial institutions are member banks and will not hesitate to put into effect any new monetary policy.
A) I
B) I and II
C) I, II, and III
D) I, II, III, and IV
Ans: B) I and II
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Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year
If these two states were to engage in trade, which of the following is TRUE? A) Missouri would specialize in pear production and trade pears to Washington pecans. B) Missouri would specialize in pecan production and trade pecans to Washington for pears. C) Washington would produce both pears and pecans and Missouri would produce neither. D) Half of both Washington's and Missouri's resources would be devoted to pears and the other half to pecans because that is the comparative advantage.
Which of the following was a consequence of the financial revolution which drastically changed risk management in the 1970s?
a. Managements created separate categories for handling different types of risks. b. A group of specialists were created who handled risk assessment for the entire organization and reported only to headquarters. c. Risk analysis was decentralized by concentrating on risks at the division-level. d. It became easier to assess market risk with the introduction of various new tools of financial management.