The Responsibility for Monetary Policy in the United States Lies

question 319

Multiple Choice

The responsibility for monetary policy in the United States lies with

• A)the president.
• B)the presidents of the Federal Reserve Banks.
• C)the chairman of the Board of Governors of the Federal Reserve System.
• D)the Board of Governors of the Federal Reserve System.
• E)both the president and the chairman of the Federal Reserve Board of Governors.

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Definitions:

Marginal Social Benefit

The additional gain to society as a whole from an additional unit of a good or service.

Emissions Tax

A tax imposed on the emission of pollutants, aimed at reducing the environmental externality costs of these emissions.

Optimal Tax

A tax designed to generate government revenue with the minimum economic distortion or welfare loss.

Marginal Social Cost

The total cost to society of producing an additional unit of a good or service, including both the cost to the producer and the cost of any negative externalities associated with production.