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Questions and Answers
What is the effect of the Fed buying bonds through open-market operations?
What is the effect of the Fed buying bonds through open-market operations?
- Shifting of the aggregate supply curve
- Decrease in aggregate demand
- Increase in money supply (correct)
- Expansion of bank reserves
Who is the key decision maker for general Federal Reserve policy?
Who is the key decision maker for general Federal Reserve policy?
- Treasury Secretary
- Regional Fed Bank Presidents
- Chair of the Fed (correct)
- President of the United States
What does it signal when the Fed announces a raise in the federal funds rate?
What does it signal when the Fed announces a raise in the federal funds rate?
- Intention to sell bonds, reduce money supply (correct)
- Intention to sell bonds, increase money supply
- Intention to buy bonds, decrease money supply
- Intention to buy bonds, increase money supply
Which action by the Fed would lead to an increase in the money supply?
Which action by the Fed would lead to an increase in the money supply?
How many members are on the Board of Governors of the Federal Reserve and how long are they appointed for?
How many members are on the Board of Governors of the Federal Reserve and how long are they appointed for?
What happens to your real income when you receive the same number of dollars every year but prices are rising?
What happens to your real income when you receive the same number of dollars every year but prices are rising?
Which of the following correctly describes the impact on bank reserves if a bank has $1,000,000 in deposits, a minimum reserve requirement of 15 percent, and bank reserves of $170,000?
Which of the following correctly describes the impact on bank reserves if a bank has $1,000,000 in deposits, a minimum reserve requirement of 15 percent, and bank reserves of $170,000?
What happens to interest rates and where does aggregate demand shift when the Federal Reserve sells bonds in the open market?
What happens to interest rates and where does aggregate demand shift when the Federal Reserve sells bonds in the open market?
Which function of money is being described when you use it to decide to save for tuition next semester?
Which function of money is being described when you use it to decide to save for tuition next semester?
According to monetarists, what is the nature of the aggregate supply curve at the natural rate of unemployment?
According to monetarists, what is the nature of the aggregate supply curve at the natural rate of unemployment?
In terms of Federal Reserve requirements, which statement is TRUE?
In terms of Federal Reserve requirements, which statement is TRUE?
If money multiplier is high, what does it imply about the banking system's ability to generate deposit dollars?
If money multiplier is high, what does it imply about the banking system's ability to generate deposit dollars?
What helps explain the multiplier effect?
What helps explain the multiplier effect?
What happens to the aggregate demand curve if government purchases decrease?
What happens to the aggregate demand curve if government purchases decrease?
What is the principal mechanism for directly changing bank reserves?
What is the principal mechanism for directly changing bank reserves?
What can a bank do if it doesn't have enough reserves?
What can a bank do if it doesn't have enough reserves?
What role does the chairman of the Federal Reserve Board of Governors serve?
What role does the chairman of the Federal Reserve Board of Governors serve?
In what function does money act as a medium of exchange?
In what function does money act as a medium of exchange?
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