macro final

3.33(C)

when the legal reserve ratio is 30 percent the monetary multiplier is

300 million (C)

A commercial Bank has required

Reduce inflationary pressures in the economy (D)

A newspaper reads

A bank grants a loan to a customer (B)

Money is "created" when

Discount Rates

Overnight loans from one bak to another for reserve purposes entail an interest rate called the:

False(B)

T/F A restrictive monetary policy reduces investment spending and shifts the economy's aggregated demand curve to the right.

False (B)

T/F The federal funds rate target is the most frequently used monetary policy tool

Reducing the discount Rate (B)

The Federal Reserve can increase aggregate demand by

Increasing commercial bank reserves (C)

The Federal reserve could reduce the money supply by:

Varies inversely with the rate of interest (B)

The asset demand for money:

Unit of account (B)

The functions of money are to serve as a:

Sm3 and 4 percent (A)

The graph one

Fed buys securities in the open market(D)

The landing ability of commercial banks increase when the:

Exchange rate (A)

The main tools that the Fed can use to alter the money supply are the required reserve ratio and the following except:

The money supply to increase (B)

The purchase of government securities from the by the Fed will cause:

The quickness with which it can be used(B)

What is one of the advantages of monetary policy over fiscal policy?

Lower interest rates, higher investments, and an expanded GDP(C)

If the fed were to reduce the required

the sales of the securities in the open market, a higher discount rate, and higher reserve requirments (C)

If the server demand- pull inflation was occurring in the economy, proper monetary policies would involve

Decrease the interest rate and increase aggregated demand (C)

An increase in the money supply

The money supply by 280 million (C)

Assuming that the federal reserve banks sells $65 million

Investment (C)

Monetary policy is expected to have its greatest impact on

They can be readily used in purchasing goods and paying debts (A)

Checkable deposits areClassified as money because :

In doing so, one sacrifices interest income,(B)

It is costly to hold money because:

Making it less expensive for the commercial banks to borrow from their best customers (C)

Lowering the discount rate has the effect of:

Open Market (A)

Which of the following is a tool of momentary policy?

true (A)

t/f a change in the reserve ratio will affect both the