The Main Function of the Federal Open Market Committee Is

question 146

Multiple Choice

The main function of the Federal Open Market Committee is

• A) to control the printing of currency.
• B) to determine the path of tax rates.
• C) to use open market operations to control the nation's money supply.
• D) to create and issue bonds on behalf of the Treasury.
• E) to oversee economic activity in the various Federal Reserve districts.

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Definitions:

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the number of units produced.

Units

Basic quantities or measures adopted by convention or by law, used as a standard to express physical quantities.

Diminishing Returns

An economic principle where the addition of a variable factor to a fixed factor leads to a decrease in the marginal output of the variable factor beyond a certain point.

Variable Factors

Components of production that can be adjusted in the short term to change the output level, such as labor and raw materials.