econ

From 2010 into the future:

mandatory federal spending will grow faster than discretionary spending. discretionary federal spending will grow faster than mandatory spending. mandatory and discretionary spending will remain relatively equal. Congress plans to eliminate all mandatory spending.

Using the traditional tools of monetary policy the Federal Reserve has direct control over _____ and through that an ability to impact ____.

monetary base; interest rates

The reserve ratio is

the percentage of every dollar deposited in a checking account that a bank may loan out. the ratio of loans to available reserves. the percentage of every dollar deposited in a checking account that a bank must maintain in reserves. the ratio of available reserves to loans made.

If money is moved from a consumer savings account into a consumer checking account,

M1 and M2 both decrease. M1 increases and M2 remains unchanged. M1 decreases and M2 increases.

Between 2004 and 2005 the Federal Reserve raised interest rates 11 times. This is an example of

discretionary fiscal policy. nondiscretionary fiscal policy. expansionary monetary policy. contractionary monetary policy.

A purchase of government debt as part of the Fed's open market operations would be an example of

expansionary fiscal policy. expansionary monetary policy. contractionary fiscal policy. contractionary monetary policy.

Programs such as Social Security and Medicare

have to be re-authorized every year. do not require re-authorization. can be cut by the President without congressional approval. have to be re-authorized every year unless the President approves their continuation.

The "monetary policy transmission mechanism" connects

individual income tax rates to aggregate demand. individual income tax rates to aggregate supply. short-term interest rates to aggregate demand. open market purchases to the Fed's balance sheet.

The Federal Reserve's Open Market Operations:

influences stock prices. increases or decreases the monetary base and influences interest rates. increases or decreases the value of gold as to influence the value of foreign currency. influences oil prices.

he fiscal year for the Federal government begins

october 1

The Federal Reserve's standard tools includes

open market operations. tax rate changes. government spending policies. labor regulations.

Which of the following represented the largest component of spending in the Federal Budget in 2014:

Social Security & Medicare Medicaid. national defense international aid

The Federal Reserve can reduce inflation by:

selling bonds to increase the money supply. selling bonds to decrease the money supply. buying bonds to increase the money supply. has no policy options that will accomplish thi

Compared to Italy and Japan in recent years, the debt as a percentage of GDP in the U.S. is

substantially smaller

The Federal Funds Rate is the rate at which

the Federal Reserve lends money to the US government. You Answered the Federal Reserve lends money to member banks. banks lend money to the Federal Reserve. banks lend to one another to meet reserve requirements.

Which of the following decides monetary policy?

the chairperson of the Federal Reserve Board the Federal Open Market Committee the President the Congress

Between 2009 and 2011, Federal Spending as a percentage of GDP ranged between

22% and 25%

The fact that you can use money to buy things is a result of which characteristic?

The fact that it is a store of value. Its use as a medium of exchange. The fact that it is a measure of value. The fact that it is backed by gold.

An increase in the monetary base will shift the

demand for loanable funds to the left. supply of loanable funds to the left. demand for loanable funds to the right. supply of loanable funds to the right.

The Fed's dual mandate instructs it to pursue:

a balanced budget. high productivity and low unemployment. maximum employment and stable prices. low unemployment and zero in flation

A federal budget deficit is the

amount by which revenues exceed expenditures. total amount owed by the federal government. amount by which federal expenditures exceed revenue. amount by which revenues fall short of projections.

logrolling occurs when

budget deficits snowball out of control. members of Congress trade votes to get their programs passed. forest companies use their political muscle. members of Congress doctor their expense logs

If the Federal Reserve wished to increase interest rates using open market operations it would

buy US government securities. sell US government securities. buy gold. buy corporate stocks.

Banks

create money because they are the ones that print it. create money by making loans. have no role in the money creation process and never have. have no role in the money creation process, though they once did.

The monetary base includes

currency held by the public plus bank reserves. You Answered currency plus checkable accounts. currency plus checkable accounts and small CDs. just cash held by the public.