ECON 101 Chapter 15

Janet Yellen is:

chair of the Board of Governors of the Federal Reserve System.

The money demand curve shows the relationship between the _____ and the _____ of money demanded.

interest rate; nominal quantity

The Federal Reserve affects interest rates by: open market operations that shift the money supply curve. setting them with regulations. wrong open market operations that shift the money demand curve. changing tax rates.

open market operations that shift the money supply curve.

(Figure: Equilibrium in the Money Market) Look at the figure Equilibrium in the Money Market. Equilibrium will occur at interest rate _____ and quantity of money _____.

r1; Q1

The federal funds rate is the interest rate on _____, and it is controlled by the _____.

reserves that banks lend to each other; Federal Open Market Committee

The Federal Open Market Committee sets the target interest rate for the next:

six weeks.

The opportunity cost of holding money is: the discount rate. zero. the interest rate when someone uses a credit card. - wrong the difference between interest rates on monetary assets and on nonmonetary assets.

the difference between interest rates on monetary assets and on nonmonetary assets.

The money demand curve is _____ because the opportunity cost of holding money is _____ related to the interest rate. downward-sloping; directly upward-sloping; directly downward-sloping; inversely upward-sloping; inversely - wrong

upward-sloping; directly

Short-term interest rates apply to financial assets due within: 24 hours. six months. wrong three months. one year.

Less than one year

In the liquidity preference model, the money supply is represented by:

a vertical line.