Which of the Following Statements Is Most Correct

question 39

Multiple Choice

Which of the following statements is most correct?

• A) The use of monetary policy in the U.S. has not changed much since the creation of the Fed.
• B) The quantitative impact on output of altering the target federal funds rate has been quite stable.
• C) Monetary policymakers operate in an environment with very little uncertainty.
• D) Monetary policymakers operate in an environment where change is quite common.

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Definitions:

Short-run Marginal Cost Curve

A curve that shows the change in total cost associated with producing one more unit of output in the short term.

Diminishing Marginal Returns

A principle that states as additional units of a variable input are added to fixed inputs, the additional output produced from each new unit eventually decreases.

Variable Resources

Inputs that change in quantity with levels of production, such as raw materials and labor.

Variable Cost

Costs that change in proportion to the level of goods or services that a business produces.