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Newest Monetary Policy Questions

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  1. When the Fed buys government bonds, the reserves of the banking systema. decrease, so the money supply decreases. b. increase,
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  2. How does the existence of a single type of accepted money help consumers?(1 point) Responses It makes it possible to make large
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  3. QuestionHow does the role of the Board of Governors compare to the role of the Federal Open Market Committee?(1 point) Responses
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  4. Which statement best describes the roles of the Federal Reserve?A. The Federal Reserve directs fiscal policy for the financial
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  5. If the Fed raised the reserve requirement, the demand for reserves woulda. increase, so the federal funds rate would rise. b.
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  6. The discount rate isa. the interest rate banks receive on reserve deposits with the Fed. b. the interest rate that banks charge
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  7. Which of the following is NOT an example of monetary policy?a. The Federal Reserve reduces the reserve requirement. b. The
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  8. Table 29-2The information in the following table pertains to the hypothetical economy of Florencial. Type of Money Amount
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  9. ther non-market-oriented measures used by the monetary authorities include:exchange control regulations moral suasion public
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  10. An increase in the reserve ratio:increases the size of the spending income multiplier decreases the size of the spending income
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  11. Use the passage to answer the question.Like other mined minerals, gold is a finite resource. Most of the largest gold mines in
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  12. The rate of inflation in a hypothetical economy is projected to be 1.5%in the coming quarter. Given this information, the
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  13. The two major policy instruments of the monetary policy are:bank loans to commercial banks and open market policy the bank rate
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  14. Other things equal, if the supply of money is reduced:Answers: the demand for money will increase. the interest rates will fall.
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  15. A decrease in the rate of interest would:Answers: decrease the opportunity cost of holding money. increase the transactions
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  16. If money is neutral,a. a change in the money supply reduces velocity proportionately; therefore, there is no effect on either
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  17. What is the cost of money?the smoothing out of fluctuations in the market the economy’s use of open market operations the
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  18. To insulate the Federal Reserve from political pressure,a. the Board of Governors are elected by the public. b. the Board of
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  19. The Board of Governors of the Federal Reserve System consists ofa. twelve members appointed by Congress. b. up to seven members
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  20. Which of the following statements is true?a. When the Fed sells government bonds, the money supply decreases. b. The FOMC meets
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  21. A decrease in the reserve requirement causesa. reserves to rise. b. reserves to fall. c. the money multiplier to rise. d. the
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  22. The Fed's tools of monetary control area. government expenditures, taxation, reserve requirements, and interest rates. b. coin,
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  23. The Fed uses open market operations to impact:a. the price of stocks. b. the price of gold. c. interest rates. d. the amount of
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  24. When the Fed pursues an expansionary open market operation it:a. Buys bonds in the secondary market. b. Buys stocks in the open
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  25. The Federal Reserve is:a. The entity that sets US fiscal policy. b. The central bank of the US. c. Part of the United States
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  26. 19.2 The monetary transmission mechanism- Other links between interest rates and the rest of the economy • The asset price
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  27. The Gold Standard Act of 1900 ended the standard known as(1 point)Responses fractional-reserve banking. fractional-reserve
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  28. The Gold Standard Act of 1900 ended the standard known as(1 point)Responses liquidity. liquidity. bimetallism. bimetallism.
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  29. Which of the following is an example of inside lag in monetary policy?The U.S. government debates a public works program and
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  30. What is the main idea of monetarism?Money should be minted in gold or silver. The money supply is the most important factor in
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  31. What is the subject of Federal Open Market Committee decisions?scheduling of banking days and hours for member banks level of
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  32. Tight money policy is _____.monetary policy that increases the money supply the belief that the money supply is the most
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  33. What effect do low interest rates have on business investment?They encourage it. They slow it down. They generally stop it
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  34. How does a bond sale by the Fed affect the money supply?The sale decreases the money supply. It does not affect the money
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  35. The money multiplier formula _____.determines the amount of funds loaned by the Federal Reserve Bank to its members is used by
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  36. What is the Federal Open Market Committee (FOMC)?Federal Reserve committee that makes key decisions about interest rates and the
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  37. Why does monetary policy usually involve a streamlined inside lag?Congress and the President act quickly on monetary policy.
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  38. What does monetary policy do?It charters new banks. It alters the supply of money. It mints new coins and prints bills. It
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  39. Why does the Federal Reserve alter monetary policy?to provide services to member banks to enable banks to clear checks to
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  40. What is one possible short-term effect of an easy money policy?increased investment spending decreasing inflation a contracting
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  41. What is a delay in implementing monetary policy called?easy monetary policy outside lag inside lag tight monetary policy
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  42. Tight money policy is _____.monetary policy that increases the money supply the belief that the money supply is the most
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  43. What monetary policy should be implemented to correct an inflationary economy?A. easy monetary policy B. laissez faire policy C.
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  44. Which of the following is an example of inside lag in monetary policy?A. The U.S. government debates a public works program and
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  45. Why does the Federal Reserve alter monetary policy?A. to enable banks to clear checks B. to lessen the effect of natural
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  46. The two major policy instruments of the monetary policy are:bank loans to commercial banks and open market policy the bank rate
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  47. The South African Reserve Bank’s primary goal is to ensure thatthere is financial stability the supply of money is equal to
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  48. Other non-market-oriented measures used by the monetary authorities include:exchange control regulations moral suasion public
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  49. The basic functions of the South African Reserve Bank include:formulating and implementing monetary policy providing economic
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  50. The two major policy instruments of the monetary policy are:bank loans to commercial banks and open market policy the bank rate
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  51. The opportunity cost of holding money is theprice level real interest rate velocity of circulation nominal interest rate
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  52. An increase in the reserve ratio:increases the size of the spending income multiplier decreases the size of the spending income
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  53. Which of the following is a role of the Federal Reserve?(1 point)Responses to gather demographic data to support U.S. businesses
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  54. The Gold Standard Act of 1900 ended the standard known as(1 point)Responses bimetallism. bimetallism. liquidity. liquidity.
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  55. Which scenario is an example of the government changing its monetary policy?(1 point) Responses the federal government sending
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  56. What does “monetary policy” mean?actions the Federal Reserve takes to influence the economy decisions about how much the
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  57. The time it takes for monetary policy to have an effect is a(n) _____.easy monetary policy inside lag outside lag tight monetary
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  58. What is the Federal Open Market Committee (FOMC)?research arm of the Federal Reserve Federal Reserve committee that makes key
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  59. Which of the following actions would the Fed take to fight inflation?raise taxes increase government spending reduce the money
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  60. What is the policy used most by the Fed to change the money supply?open market operations changes in the discount rate changes
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  61. Which of the following is a role of the Federal Reserve?(1 point)Responses to monitor and change the amount of money in
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  62. Which of the following is a role of the Federal Reserve?(1 point)Responses to regulate transactions in the stock exchange to
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