Ch16 Econ

If nominal GDP is $600 billion and, on the average, each dollar is spent three times per year, then the amount of money demanded for transactions purposes will be:

It is costly to hold money because:

An increase in nominal GDP increases the demand for money because:

The opportunity cost of holding money:

If the quantity of money demanded exceeds the quantity supplied:

Answer the question on the basis of the following information for a bond having no expiration date: bond price = $1,000; bond fixed annual interest payment = $100; bond annual interest rate = 10 percent. Refer to the given information. If the price of this bond falls by $200, the interest rate will:

Answer the question on the basis of the following information for a bond having no expiration date: bond price = $1,000; bond fixed annual interest payment = $100; bond annual interest rate = 10 percent. Refer to the given information. If the price of this bond increases to $1,250, the interest rate will:

Which of the following statements is correct?

Which of the following is an asset on the consolidated balance sheet of the Federal Reserve Banks?

Reserves must be deposited in the Federal Reserve Banks by:

The securities held as assets by the Federal Reserve Banks consist mainly of:

Federal Reserve Notes in circulation are:

When a commercial bank borrows from a Federal Reserve Bank:

The Federal Reserve Banks sell government securities to the public. As a result, the checkable deposits:

The Federal Reserve Banks buy government securities from commercial banks. As a result, the checkable deposits:

The commercial banking system borrows from the Federal Reserve Banks. As a result, the checkable deposits

In the United States, monetary policy is the responsibility of the:

The four main tools of monetary policy are:

Open-market operations refer to:

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

Suppose the Federal Reserve Banks sell $2 billion of government bonds to the public, which pays for them by drawing checks. As a result, commercial bank reserves will:

The Federal Reserve System regulates the money supply primarily by:

Which of the following is correct? When the Federal Reserve buys government securities from the public, the money supply:

Open-market operations change:

An increase in the legal reserve ratio:

Assume that the commercial banking system has checkable deposits of $10 billion and excess reserves of $1 billion at a time when the reserve requirement is 20 percent. If the reserve requirement is now raised to 30 percent, the banking system then has:

When the required reserve ratio is decreased, the excess reserves of member banks are:

A decrease in the reserve ratio increases the:

Which of the monetary policy tools can alter both the level of excess reserves and the money multiplier?

The interest rate at which the Federal Reserve Banks lend to commercial banks is called the:

Which of the following tools of monetary policy is considered the most important on a day-to-day basis?

Which of the following tools of monetary policy is flexible and able to affect bank reserves quickly and by relatively specific amounts?

Which of the following tools of monetary policy has not been used since 1992?

Which of the following monetary policy tools was introduced in 2008?

Interest paid on reserves held at the Fed:

Beginning in 2008, the Fed was allowed to:

Which of the following actions by the Fed most likely increase commercial bank lending?

The interest rate that banks charge one another on overnight loans is called the:

Which of the following statements is true? a)The Federal Reserve sets the federal funds rate. b)The Federal Reserve sets the target for the federal funds rate, and then uses the reserve ratio to push banks toward that target. c)The Federal Reserve does not set the federal funds rate, but it influences it through the use of its open-market operations. d)The Federal Reserve will set a higher target for the federal funds rate if pursuing an expansionary monetary policy.

A federal funds rate reduction that is caused by monetary policy will:

To reduce the federal funds rate, the Fed can:

To increase the federal funds rate, the Fed can:

If the Fed wants to lower the federal funds rate, it should:

Other things equal, which of the following would increase the federal funds rate?

The benchmark interest rate that banks use as a reference point for a variety of consumer and business loans is the:

According to the Taylor rule:

If the Fed were to set policy according to the Taylor rule, then if real GDP falls by 2 percent below potential GDP, the Fed should:

Which of the following best describes the cause-effect chain of an expansionary monetary policy?

If the Federal Reserve authorities were attempting to reduce demand-pull inflation, the proper policies would be to:

A contraction of the money supply:

Monetary policy is expected to have its greatest impact on:

Which of the following actions by the Fed would cause the money supply to increase?

Which of the following best describes the cause-effect chain of a restrictive monetary policy?

The purpose of an expansionary monetary policy is to shift the:

All else equal, when the Federal Reserve Banks engage in a restrictive monetary policy, the prices of government bonds usually:

All else equal, when the Federal Reserve Banks engage in an expansionary monetary policy, the interest rates received on government bonds usually:

The price of government bonds and the interest rate received by a bond buyer are:

A restrictive monetary policy is designed to shift the:

As part of its zero interest rate policy (ZIRP), the Federal Reserve:

Which of the following is a difference between "quantitative easing" and ordinary open-market operations?