The Federal Open Market Committee

question 12

Multiple Choice

The Federal Open Market Committee

• A)operates with almost complete discretion over monetary policy.
• B)is required to increase the money supply by a given growth rate each year.
• C)is required to keep short-term interest rates within a range set by Congress.
• D)is required by its charter to change the money supply using a complex formula that concerns the tradeoff between inflation and unemployment.

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Definitions:

Net Migration

The difference between the number of individuals entering and leaving a geographic area during a specific time period, which can impact population size and composition.

Labor Supply Curve

Represents the relationship between the wage rate and the quantity of labor that workers are willing to supply.

Equilibrium Outcome

A state in which market supply and demand balance each other, and, as a result, prices become stable.

Economic Rent

The excess payment made to a factor of production over and above what is needed to keep it in its current use, often due to unique circumstances.