Which of the Following Is True

question 63

Multiple Choice

Which of the following is true?

• A)The Fed sets growth target ranges for several aggregates in order to be absolutely certain they are correct.
• B)The Fed currently sets growth target ranges for the aggregates because of the instability of the relationship between changes in the aggregates and changes in economic activity.
• C)The Fed uses M1 primarily in the execution of monetary policy because it is the aggregate most widely used to make transactions.
• D)The Fed has become more open in recent years.

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Definitions:

Supply Curve

A graphical representation that shows the relationship between the price of a good or service and the quantity supplied by producers.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given period.

Producer Surplus

The difference between the amount producers are willing to sell their goods for and the actual amount they receive due to higher market prices.

Consumer Surplus

The gap highlighting the difference between the sum consumers intend to pay and what they actually fork out for a good or service.