Although a Corporation That Is Owned by Its Member Banks

question 53

Multiple Choice

Although a corporation that is owned by its member banks, the Federal Reserve System

• A)reports directly to the president in an annual report.
• B)is quite independent of them, and they receive almost none of the Fed's profits.
• C)is administered by Congress and all its profits are distributed to the member banks.
• D)turns all its profits over to the state governments of each district bank.

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Definitions:

MPC

Marginal Propensity to Consume, which represents the proportion of an increase in income that gets spent on consumption instead of being saved.

Investment Spending

Expenditures on new physical assets like buildings, machinery, and equipment, contributing to future production capacity.

GDP

Gross Domestic Product, a monetary measure of the market value of all final goods and services produced in a specific time period.

MPC

Marginal Propensity to Consume, the proportion of additional income that a consumer spends on purchasing goods and services, rather than saving.