1.A decrease in the reserve ratio increases the:
a. amount of actual reserve in the banking system
b. amount of excess reserves in the banking system
c. number of goverment securities held by the federal reserve banks
d. ratio of coins to paper currency
2.The federal reserve banks sell government securities to the public as a result, the checkable deposits?
a. of commercial banks unchaged, but their reserves increase
b. and reserves of commercial banks both decrease
c. of commercial banks unchanged, but their reserves decrease.
d. of commercial banks are both unchanged
3.The federal reserve does not set the federal rate , but it influences it through the use of open market operations
a. true
b. false
4.In recent years, the Federal Reserve has:
a. paid closer attention to M1 than M2 in setting monetary targets
b. relied more on changes in the discount rate than open-market operations in establishing monetary policy
c. has increased M2 at a fixed annual rat, regardless of the health of the economy
d. taken an activist, pragmatic approach to monetary poilcy, paying close attention to interest rates
5. Reserves must be deposited in the Federal Reserve Banks by:
a. only commercial banks which are members of the federal reserve systems
b. all depository institutions, that is, all commercial banks and thrift institutions
c.state charted commercial banks only
d. federally chartered commercial banks only
6.According to the Taylor rule, when real GDP is at its potential and inflation is at its target rate of 2%, the Fed should?
a. carefully lower the federal funds rate in an attempt to stimulate non-inflationary real gdp growth
b. raise the federal fundds rate in an attempt to eliminate the remaning inflation
c. lower the federal funds rate to lower borrowing costs for the federal goverment
d. keep the federal funds rate at 4%
7.Economist Milton Friedman is most closely associated with:
a. Keynesian economics
b. the rational expectations theory
c. supply-side economics
d. monetarism
THANK YOU!!
a. amount of actual reserve in the banking system
b. amount of excess reserves in the banking system
c. number of goverment securities held by the federal reserve banks
d. ratio of coins to paper currency
2.The federal reserve banks sell government securities to the public as a result, the checkable deposits?
a. of commercial banks unchaged, but their reserves increase
b. and reserves of commercial banks both decrease
c. of commercial banks unchanged, but their reserves decrease.
d. of commercial banks are both unchanged
3.The federal reserve does not set the federal rate , but it influences it through the use of open market operations
a. true
b. false
4.In recent years, the Federal Reserve has:
a. paid closer attention to M1 than M2 in setting monetary targets
b. relied more on changes in the discount rate than open-market operations in establishing monetary policy
c. has increased M2 at a fixed annual rat, regardless of the health of the economy
d. taken an activist, pragmatic approach to monetary poilcy, paying close attention to interest rates
5. Reserves must be deposited in the Federal Reserve Banks by:
a. only commercial banks which are members of the federal reserve systems
b. all depository institutions, that is, all commercial banks and thrift institutions
c.state charted commercial banks only
d. federally chartered commercial banks only
6.According to the Taylor rule, when real GDP is at its potential and inflation is at its target rate of 2%, the Fed should?
a. carefully lower the federal funds rate in an attempt to stimulate non-inflationary real gdp growth
b. raise the federal fundds rate in an attempt to eliminate the remaning inflation
c. lower the federal funds rate to lower borrowing costs for the federal goverment
d. keep the federal funds rate at 4%
7.Economist Milton Friedman is most closely associated with:
a. Keynesian economics
b. the rational expectations theory
c. supply-side economics
d. monetarism
THANK YOU!!