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-Sale of securities in open market -Higher discount rate -Higher reserve requirements

If demand-pull inflation was occurring in the economy, proper monetary policy would consist of what?

The higher interest rates, a contracted GDP, and a higher rate of inflation.

If the Fed were to reduce the required reserve ratio we would expect:

A bank grants a loan

Money is created when:

Stimulate the economy

News paper headline states. "Fed raises discount rate for third time this year" would state that the federal reserve is trying to do what?

Federal funds rate

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

Varies inversely with the rate of interest

The asset demand for money:

Reducing the discount rate

The federal reserve can increase aggregate demand by:

Increase commercial bank reserves

The federal reserve could reduce the money supply by:

Unit of account, store value, and medium of exchange.

The functions of money are to serve as a

Feds buy securities in the open market

The lending ability of commercial banks increases when:

The money supply to increase

The purchase of government securities from the public by the fed will cause:

Banks can create money through lending their reserves

What is one significant characteristic of fractional reserve banking?

Exchange Rate

What tools that the fed NOT use to alter the money supply are the required-reserve ration.

3.33

When the legal reserve ratio is 30 Percent, the monetary multiplier is?

The interest rate will rise

If the quantity of money demanded exceeds the quantity supplied:

Decreases the interest rate and increase the aggregate demand

An increase in the monetary supply usually:

Increase the transactions demand and the total demand for money

An increase in the nominal GDP will:

A tax increase and an increase in the money supply

Assuming the government wishes to either increase or decrease the level of aggregate demand, which of the following pairs are not consistent policy measure?

Investment

Monetary policy is expected to have its greatest impact on:

They can be readily used in purchasing goods and paying debts.

Checkable deposits are classified as money because:

Making it less expensive for commercial banks to borrow from central banks

Lowering the discount rate has the effect of:

FALSE

True/ False: The federal funds rate target is the most frequently used monetary policy tool

The quickness which it can be used

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

Open-market operations

Which of the following is a tool of monetary policy?