What 3 tools can the FED use to manipulate overall economic activity?

3. How is Money Supply/Liquidity in the banking system influnced by changes in Monetary Policy? What 3 tools can the FED use to manipulate overall economic activity?

4.What are characteristics of MONOPOLY as a market structure? What is the meaning of WELFARE LOSS associated with Monopoly?

5.What is considered an optimal rate of unemployment – “natural rate”? What are four different types of unemployment found in the economy?

What 3 tools can the FED use to manipulate overall economic activity?credit union

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3. Open market operations, change the reserve requirement, change the Dicount Rate.

4. one supplier, barriers to entry, pricing power, no substitutes. The price is set such that MR=MC. This maximizes the surplus captured by the firm, but there is a deadweight loss of social welfare. That is, the sum of consurmer surplus and economic profits for monopolies is less than that sum for perfectly competitive industries.

5. Full employment does not mean 0% unemployement. In vague terms, it represents the hypothetical unemployment rate consistent with aggregate production being at the %26quot;long-run%26quot; level. This is the level the economy reaches in the absence of various temporary frictions such as incomplete price adjustment in labor and goods markets. These frictions can result in cyclical, frictional, structural, and classical forms of unemployment.

What 3 tools can the FED use to manipulate overall economic activity?

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Homer nailed it. Take his answers and go.