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Answer the following three questions dealing with monetary policy.
(a) Explain how the Federal Reserve might carry out a "tight" monetary policy.
(b) Explain how the Federal Reserve might carry out an "easy" monetary policy.
(c) How would each of the policies affect the equilibrium interest rate?
Unused Capacity
Available but not currently utilized production or service capacity within a business.
Fixed Manufacturing Overhead
Costs associated with manufacturing that do not vary with the level of production, such as rent, salaries, and insurance.
Machine-Hours
A measure of production time used in manufacturing, calculated by multiplying the number of machines by the hours they are operated.
Machine-Hours
An indicator of the amount of time machines are actively running, reflecting the cumulative hours of operation over a defined timeframe.
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