Which of the Following Are Policy Instruments Available to the Fed

question 50

Multiple Choice

Which of the following are policy instruments available to the Fed as it tries to achieve its macroeconomic goals?
i. government expenditure on goods and services and taxes
ii. the government budget deficit or surplus
iii. changes in the federal funds rate

• A) i and ii
• B) iii only
• C) i and iii
• D) ii and iii
• E) ii only

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Definitions:

Variable Cost

Costs that change in proportion to the level of production or activity in a business.

Variable Cost Method

A pricing strategy in which the price is based on the variable costs of producing a good or service, not including fixed costs.

Cost-Plus Approach

A pricing strategy where a fixed percentage or fixed amount is added to the cost of producing a product to determine its sale price.

Total Cost Method

An accounting approach that sums up all costs associated with the production and sale of goods or services to determine total expense.