The Federal Open Market Committee Is Made Up of

question 22

Multiple Choice

The Federal Open Market Committee is made up of

• A) five of the seven Federal Reserve Board governors.
• B) the Board of Governors plus five of the presidents of the 12 Federal Reserve banks.
• C) 12 members of the Federal Advisory Council plus the chairperson of the Federal Reserve Board.
• D) the president of the United States, the secretary of the Treasury, and the members of the Federal Reserve Board.
• E) 12 commercial bank presidents chosen by the president of the United States.

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Definitions:

Yearly Return

The total gain or loss on an investment over a one-year period, expressed as a percentage of the investment’s initial cost.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, and loan payments.

Annual Fixed Costs

Expenses that do not change over a year regardless of the level of production or sales.

Variable Costs

Costs that vary directly with the level of production or sales, such as materials and labor.