The Members of the Board of Governors of the Fed

question 139

Multiple Choice

The members of the Board of Governors of the Fed are:

• A)elected by the member banks.
• B)chosen by the state governors.
• C)elected for seven-year terms.
• D)all replaced after each Presidential election.
• E)appointed by the president with the approval of the Senate.

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Definitions:

Profit-Maximizing

The process or strategy of adjusting production and pricing to achieve the highest possible profit.

Socially Optimal Price

The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product.

Marginal Cost

The expenses associated with creating an extra unit of a good or service.

Natural Monopoly

A market condition where the most efficient scale of production is achieved when a single firm supplies the entire market due to high fixed or start-up costs.