In the United States monetary policy is the responsibility of the: |
C) Board of Governers |
The three main tools of monetary policy are: |
C) the discount rate, the reserve ratio, and open-market operations |
The Fed can change the money supply by: |
D) doing all of the above |
Open-market operations refer to: |
B) the purchase or sale of government securities by the Fed. |
The purchase of government securities from the public by the Fed will cause: |
B) the money supply to increase |
Suppose the Federal Reserve Bank sell $2 billion of government bonds to the public which pays for them by drawing checks. As a result, commercial bank reserves will: |
C) decrease by $2 billion |
Answer the next question on the assumption that the legal reserve ratio is 20 percent. Suppose that the Fed sells $500 of government securities to commercial banks buys $500 of securities from individuals, who deposit the cash in checking accounts. As a result of the above transactions, reserves in the banking system will: |
A) remain unchanged |
When the required reserve ratio is increased, the excess reserves of member banks are: A) reduced, but the multiple by which the commercial banking system can lend is unaffected. B)reduced, but multiple by which the commercial banking system can lend is increased C) increased and the multiple by which the commercial banking system can lend is increased. D)reduced and the multiple by which the commercial banking system can lend is reduced |
D) reduced and the multiple by which the commercial banking system can lend is reduced |
A change in the legal reserve ratio affects the: A) amount of actual reserves in the banking system |
B) amount of excess reserves in the banking system |
If the Fed were to increase the legal reserve ratio, we would expect: |
C) higher interest rates, a contracted GDP, and appreciation of the dollar |
The discount rate is the interest: |
B) rate at which the Federal Reserve Banks lend to commercial banks |
A commercial bank can add to its actual reserve by: |
D) borrowing from a Federal Reserve Bank |
If the economy were encountering a serve recession, proper monetary and fiscal policies would call for: B) buying government securities, reducing the reserve ratio, reducing the discount rate, and a budgetary deficit C) buying government securities, raising the reserve ratio, raising the discount rate, and a budgetary surplus D) buying government securities, reducing the reserve ratio, raising the discount rate, and a budgetary deficit. |
B) buying government securities, reducing the reserve ratio, reducing the discount rate, and a budgetary deficit |
If severe demand-pull inflation was occurring in the economy, proper government policies would involve a government: A) deficit and the purchase of securities in the open market, a higher discount rate, and higher reserve requirements B) deficit and the sale of securities in the open market, a higher discount rate, and lower reserve requirements C) surplus and the sale of securities in the open market, a higher discount rate, and higher reserve requirements D) surplus and the purchase of securities in the open market, a lower discount rate, and lower reserve requirement |
C) surplus and the sale of securities in the open market, a higher discount rate, and higher reserve requirements |
The problem of "cyclical asymmetry" refers to the idea that: A) a tight money policy can force a contraction of the money supply, but an easy money policy may not achieve an expansion of the money supply B) the monetary authorities have been less willing to use an easy money policy than they have a tight money policy C) cyclical downswings are typically of longer duration than cyclical upswings. D) an easy money policy can force an expansion of the money supply, but a tight money policy may not achieve a contraction of the money supply. |
A) a tight money policy can force a contraction of the money supply, but an easy money policy may not achieve an expansion of the money supply |
ECON201- Macroeconomics (practice 3)
Share This
Unfinished tasks keep piling up?
Let us complete them for you. Quickly and professionally.
Check Price