If the Fed Raises Its Target for the Federal Fund

question 191

Multiple Choice

If the Fed raises its target for the federal fund rate,this indicates that

• A)the Fed is pursuing an expansionary monetary policy.
• B)the Fed is pursuing a contractionary monetary policy.
• C)the Fed is attempting to combat deflation.
• D)The Fed is concerned that the growth in aggregate demand is too slow to keep up with potential GDP.

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Definitions:

Monopolist

A single supplier in a market that controls all the goods or services of a particular type, without any competitors.

AC

Stands for Average Cost, which is the total cost of production divided by the number of goods produced.

Barriers To Entry

Obstacles that make it difficult for new competitors to enter a market, such as high startup costs or regulatory requirements.

Monopoly

a market structure characterized by a single seller who has exclusive control over a product or service, often leading to higher prices and less competition.