Podcast
Questions and Answers
If a bank needs to borrow funds from the Federal Reserve to fund a temporary shortage in reserves, it would borrow funds at the:
If a bank needs to borrow funds from the Federal Reserve to fund a temporary shortage in reserves, it would borrow funds at the:
If a monetary policy is focused on combating inflation, which open market actions by the Federal Reserve will most effectively accomplish this?
If a monetary policy is focused on combating inflation, which open market actions by the Federal Reserve will most effectively accomplish this?
If a central bank's targeted inflation rate is above the current rate, the central bank is most likely to:
If a central bank's targeted inflation rate is above the current rate, the central bank is most likely to:
Which of the following is least likely a function or objective of a central bank?
Which of the following is least likely a function or objective of a central bank?
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If the US Federal Reserve decides to decrease the money supply, which of the following is most likely to occur in the short run?
If the US Federal Reserve decides to decrease the money supply, which of the following is most likely to occur in the short run?
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Which of the following policy tools is the least likely to be available to the US Federal Reserve Board?
Which of the following policy tools is the least likely to be available to the US Federal Reserve Board?
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Which of the following statements regarding US Federal Reserve open market operations is least accurate?
Which of the following statements regarding US Federal Reserve open market operations is least accurate?
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When the Federal Reserve sells government securities on the open market, bank reserves are:
When the Federal Reserve sells government securities on the open market, bank reserves are:
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Contractionary monetary policy is least likely to decrease consumption spending by decreasing:
Contractionary monetary policy is least likely to decrease consumption spending by decreasing:
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If the Federal Reserve wishes to lower market interest rates without changing the discount rate, it can:
If the Federal Reserve wishes to lower market interest rates without changing the discount rate, it can:
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The primary objective of a central bank is typically to:
The primary objective of a central bank is typically to:
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Which of the following is least likely to be a function of the central bank?
Which of the following is least likely to be a function of the central bank?
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A central bank that wants to increase short-term interest rates is most likely to:
A central bank that wants to increase short-term interest rates is most likely to:
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The open market sale of Treasury securities by the Federal Reserve is least likely to result in:
The open market sale of Treasury securities by the Federal Reserve is least likely to result in:
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A country is experiencing a core inflation rate of 7% during a recessionary period of real GDP growth. If the central bank has a single mandate to achieve price stability and uses inflation targeting with an acceptable range of zero to 4%, its monetary policy response is most likely to decrease:
A country is experiencing a core inflation rate of 7% during a recessionary period of real GDP growth. If the central bank has a single mandate to achieve price stability and uses inflation targeting with an acceptable range of zero to 4%, its monetary policy response is most likely to decrease:
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Central banks are most likely to pursue a target inflation rate:
Central banks are most likely to pursue a target inflation rate:
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Central banks pursuing expansionary policies may:
Central banks pursuing expansionary policies may:
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Assume the US economy is undergoing a recession. In its efforts to stimulate the economy by trying to influence short-term interest rates the Fed is most likely to take which two actions?
Assume the US economy is undergoing a recession. In its efforts to stimulate the economy by trying to influence short-term interest rates the Fed is most likely to take which two actions?
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If a country's economy is growing at an unsustainably rapid rate and the central bank decreases its target overnight interest rate, the country's:
If a country's economy is growing at an unsustainably rapid rate and the central bank decreases its target overnight interest rate, the country's:
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Xanadu attempts to decrease its inflation rate by implementing contractionary monetary policy. Which of the following is most likely to be the long-run effect on Xanadu's trade balance as a result of the monetary policy change?
Xanadu attempts to decrease its inflation rate by implementing contractionary monetary policy. Which of the following is most likely to be the long-run effect on Xanadu's trade balance as a result of the monetary policy change?
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Silvano Jimenez, an analyst at Banco del Rey, is reviewing recent actions taken by the US Federal Reserve (the Fed) in setting monetary policy. Recently, the Fed decided to increase the money supply, which has resulted in a decrease in real interest rates. At a staff meeting, Jimenez brings this matter to the attention of his colleagues and makes the following statements:
Statement 1: Although the money supply increase has led to a decrease in real interest rates, we should begin to see US investors decrease their investments abroad and the US dollar will appreciate in the foreign exchange market.
Statement 2: The Fed's increase in the money supply will increase the amount of imports into the US.
Statement 1, Statement 2:
Silvano Jimenez, an analyst at Banco del Rey, is reviewing recent actions taken by the US Federal Reserve (the Fed) in setting monetary policy. Recently, the Fed decided to increase the money supply, which has resulted in a decrease in real interest rates. At a staff meeting, Jimenez brings this matter to the attention of his colleagues and makes the following statements:
Statement 1: Although the money supply increase has led to a decrease in real interest rates, we should begin to see US investors decrease their investments abroad and the US dollar will appreciate in the foreign exchange market.
Statement 2: The Fed's increase in the money supply will increase the amount of imports into the US.
Statement 1, Statement 2:
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