Answer:
Changes income, which changes consumption, which further changes income
Explanation:
Fiscal policy is an effective technique to control savings, income and consumptions because of its multiplier effect. The first effect of fiscal policy is that it changes income and that change in income leads to a change in consumption because of purchasing power; likewise, due to the change in consumption income changes. So, fiscal policy has a multiplier effect.
The Federal Reserve is responsible for monitoring the money supply and the general stability and safety of u. s. banking system.
The US Central Banking System - The Federal Reserve System or Federal Reserve Board (Fed) is the most powerful economic institution in the United States and possibly the world. Its core responsibilities include setting interest rates, managing the money supply, and regulating financial markets.
The Federal Reserve promotes the safety and soundness of individual financial institutions and oversees their impact on the financial system as a whole.
The FOMC controls the country's money supply. The voting members of the FOMC are the Board of Governors, the president of the Federal Reserve Bank of New York, and the presidents of the other four Reserve Banks, who function on a rotating basis. All Reserve Bank Governors participate in FOMC policy discussions.
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Answer: C. The ATC curve eventually slopes upward because average variable cost eventually increases
Explanation:
The Law of Diminishing Marginal Returns causes the Average Total Cost curve to eventually slope upwards because the Average Variable Cost will increase.
Why?
At first, with production increasing, a firm will be very efficient at producing a certain good thereby driving the cost down per unit. As time goes on however, the law of Diminishing Marginal Returns comes into play as more is invested into the business. The cost per unit will therefore rise which will lead to the ATC curve going upwards.
I have included a simple graph to illustrate.
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