The Theory of Bureaucratic Behavior When Applied to the Fed

question 93

Multiple Choice

The theory of bureaucratic behavior when applied to the Fed helps to explain why the Fed

• A) resists so vigorously congressional attempts to limit the central bank's autonomy.
• B) is secretive about the conduct of future monetary policy.
• C) sought less control over banks in the 1980s.
• D) all of the above.
• E) only A and B of the above.

---

Definitions:

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in no net profit or loss.

Fixed Expenses

Costs that do not fluctuate with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Expenses

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

Variable Expense Ratio

The proportion of variable expenses to total sales, indicating how variable costs change with changes in sales volume.