If Most Disturbances in Our Economy Are Coming from the Expenditure

question 30

Multiple Choice

If most disturbances in our economy are coming from the expenditure sector, the Fed should

• A)buy government securities whenever interest rates go up to keep income stable
• B)sell government securities whenever interest rates go up to keep interest rates stable
• C)follow money supply targets rather than interest rate targets
• D)follow interest rate targets rather than money supply targets
• E)change reserve requirements more frequently

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Definitions:

Vertical Mergers

A combination of two or more companies involved in different stages of the supply chain process for a specific product or service.

Economic Efficiencies

A measure of how well resources are used to achieve economic goals, minimizing waste and maximizing output.

Clayton Act

A U.S. antitrust law enacted in 1914 to prevent anti-competitive practices in their incipiency and to supplement the Sherman Antitrust Act.

Market Power

The ability of a company or entity to influence or control prices and market conditions within a particular industry or market segment.