Question

The members of the Board of Governors of the Federal Reserve are appointed for:

7 years.

life.

14 years.

4 years.

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The aggregate demand curve shows the relationship between the:

growth rate of real output and the inflation rate.

growth rate of consumption and the inflation rate.

growth rate of real output and the growth rate of the money supply.

inflation rate and the growth rate of the money supply.

Answer 1

The members of the Board of Governors of the Federal Reserve are appointed for 14 years. Thus 3rd option is the answer. President appoints these board members for 14 years so that there is stability in the macroeconomic decisions and long term continuity, otherwise it will be difficult to manage the economy, if they serve a shorter notice.

Aggregate demand curve shows the relationship between the growth rate of real output which is essentially the total quantity of output demanded in the economy and the inflation rate which is the price level in the economy. Thus 1st option is the answer as demand changes are mainly cause by price fluctuations.