![]() interest rate (cost of borrowing money) and consumption levelĬ. the demand for money and the interest rateī. negative) relationship between all of the following, except: a. sell government securities, raise reserve requirements, and raise the discount rate. sell government securities, raise reserve requirements, and raise the discount rate.ĭ. buy government securities, raise reserve requirements, and raise the discount rate.ĭ. sell government securities, lower reserve requirements, and lower the discount rate.Ĭ. sell government securities, raise reserve requirements, and lower the discount rate.ī. an increase in real GDP, an increase in money demand, and in increase in the interest rate If the Federal Reserve authorities wanted to reduce inflationary pressures, the proper policies would be to: a. an increase in real GDP, an increase in money demand, and an increase in the interest rateĭ. a decrease in real GDP, a decrease in money demand, and a decrease in the interest rateĭ. an increase in real GDP, a decrease in money demand, and a decrease in the interest rateĬ. a decrease in real GDP, an increase in money demand, and an increase in the interest rateī. If Government announces a tax cut, which of the following most likely happens? a. increase taxes, sell securities and increase the discount rate. increase taxes, sell securities and reduce the discount rate.Ī. increase taxes, buy securities and reduce the discount rate. ![]() reduce taxes, sell securities and increase the discount rate. A well coordinated fiscal and monetary policy solution would be to a. increases the amount of excess reserves that banks hold, encouraging them to make loans to the general public A country reports that its actual real GDP is greater than its potential real GDP, inflation is high and the actual unemployment rate is less than the natural rate of unemployment. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general publicĬ. increases the amount of excess reserves that banks hold, encouraging them to make loans to the general publicĭ. raises the costs of borrowing from the Fed, discouraging banks from making loans to the general publicĬ. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general publicī. reducing the required-reserve ratio When the Fed lowers the legal reserve requirement, it: A. selling government bonds in the open marketĪ. buys bonds from the Fed Which of the following actions by the Fed would increase the money supply? A. borrows money in the federal funds marketĭ. $900 A bank will be able to make fewer loans if it: A. If it accepts a $ 1,000 deposit, then its excess reserve balance will be: A. No one since the Fed is and independent agency Imagine the Odyssey National is a brand new bank, and that its legal reserve requirement is 10 percent. no one since the Fed is an independent agencyĭ. With respect to control of the money supply, the law requires the Fed to take orders from: A.
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