Passage of the Federal Reserve Act of 1913 came largely in response to: (a) a massive inflow of gold to the United States that caused the money supply to soar and inflation to result; (b) the need for financing of military operations in World War I; (c) a desire to become the only major country in the world with a central bank; (d) a series of financial panics over the previous half century;

Actual GDP in a country is estimated to be 10 percent above potential GDP. Prices are virtually unchanged from one year ago. Unemployment is 3 percent of the civilian work force, much lower than it has been in many years. Which of the following policies would be the most appropriate for improving these economic conditions? decreases in interest rates by the central bank decreases in reserve requirements on deposits at commercial banks to protect depositors reductions in the federal debt decreases in corporate and personal income taxes

Question 21 The rate targeted by the Federal Reserve System as it conducts monetary policy is the fed funds rate Treasury bill rate discount rate prime rate

Suppose three economies are hit with the same negative supply shock.   In country A, inflation initially rises and output falls; then inflation rises more and output increases.   In country B, inflation initially rises and output falls; then both inflation and output fall.   In country C, inflation initially rises and output falls; then inflation falls and output eventually increases. What type of stabilization approach did each country take?   The answer choices for each country are: Stabilize inflation, stabilize output, or do nothing