Econ test 4

Which of the following would be described as the recognition lag?

The time required to know that there is a recession

expansionary monetary policy would shift the

aggregate demand curve to the right

The mistiming problem with discretionary fiscal policy results from

all of the options are correct

The federal funds rate is the rate at which

banks lead to one another to meet reserve requirements

If the federal reserve wished to decrease interest rates using open market operations it would

buy US government securities

Between 2001 and 2003 the federal reserve cut the interest rate 12 times this is an example of

expansionary monetary policy

When the federal reserve wishes to, in the long run, increase real GDP it

has no policy options that will accomplish this

the federal reserve expanded their traditional tools

labor regulation

if interest rates near zero fail to stimulate borrowing, the economy

liquify trap

the amount of money that a bank must keep on reserve at the federal reserve

reserve ratio

An increase in the supply of overnight money will shift the

supply of loanable funds to the left

Thompson

texas tech

An example of nondiscretionary fiscal policy would be

the existence of the progressive federal income tax

The institution that governs monetary policy is

the federal reserve

Discretionary Fiscal Policy differs from Non discretionary Fiscal Policy in that

the former requires timely decisions whereas the latter is built into the system

When the federal reserve wishes to, in the short run, decrease inflation it

will increase the money supply by selling bonds

national bureau

2 consecutive

the federal reserves long standing tools include

Reserve ratio

Fiscal Policy is controlled by

Congress and the President