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One Way That Government Can Encourage the Production of Goods

question 197

True/False

One way that government can encourage the production of goods or services that have external benefits is to subsidize the good or service.


Definitions:

Fed Chairman

The leading figure of the Federal Reserve, the central banking system of the United States, responsible for monetary policy direction.

Federal Funds Market

A market where banks lend and borrow reserves from each other overnight in order to meet reserve requirements set by the central bank.

Depository Institution

A financial institution legally allowed to accept monetary deposits from consumers, such as banks and credit unions.

Federal Home Loan Bank Board

A now-defunct U.S. government agency that oversaw the Federal Home Loan Banks, which were created to support home mortgage lending and community investment.

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