MACRO FINAL 2

An increase in interest rates (due to a decrease in the money supply) will

When the Fed sells bonds in the open market, we can expect:

Which of the following is true regarding the reserve requirements?

The major tools of monetary policy available to the Federal Reserve System are

The Board of Governors of the Federal Reserve System is

The _____ rate is the interest rates charged when a bank lends reserves to another bank.

If the Fed sells government bonds, bank reserves will:

A liquidity trap is said to exist when a change in monetary policy has no effect on:

During an economic slump, policies that lower interest rates may not actually boost investment because:

Which of the following is not a function of the Federal Reserve System?

What are the three types of monetary policy lags?

When a member bank borrows reserves from the Fed,

Which of the following are primary functions of a central bank? I. act as a regulator of banks II. issue government bonds III. set monetary policy IV. regulate dividend payments by corporations

Suppose the economy experiences a recessionary gap. Expansionary monetary policy will:

When the Fed conducts an open market sale, it

The Federal Reserve System I. is the central bank for the United States. II. is a United States government owned bank. III. is a branch of the Treasury of the United States.

Suppose the economy experiences a recessionary gap. Expansionary monetary policy that increases the money supply will

If inflation is a threat, then the Fed will be expected to engage in:

When the Federal Reserve conducts open market transactions, it

Which of the following are monetary policy goals? I. maintain high interest rates II. keep unemployment rates low III. reduce the size of the banking sector IV. prevent high rates of inflation

To an economist, buying assets like stocks and bonds is a way to:

Which of the following decreases the demand for money?

Who of the following would not generate demand for dollars

Suppose a bank has $10,000 in deposits and $1,000 in reserves. The required reserve ratio is 5%. Which of the following occurs if the required reserve ratio is increased to 10%?

If the Fed acts to decrease the money supply,

An increase in interest rates due to a decrease in the money supply will

If the Federal Reserve is currently paying 1% interest on excess bank reserves deposited with the Fed, but then reduces that interest rate to 0.5%, banks may decide to generate ______ loans, and the money supply may _____.

Which of the following increases the demand for money?

If the supply of bonds in the United States decreases, bond prices will rise. When bond prices rise interest rates will

A $1,000 bond, which matures in one year, has a price of $925. The interest rate on this bond is

All of the following are determinants of money demand except

In deciding how much money to hold, individuals

Suppose you sell a $1,000 bond that matures in 1 year for $950. Calculate the interest rate you will have to pay on this bond.

An increase in interest rates is likely to cause

The process by which risks are shared among many different assets or people is called

Stockholders receive returns on their financial investment in the form of _____ and _____.

The crowding-out effect refers to which of the following?

The demand for bonds curve slopes downwards because

Shares of stock are:

When the central bank sells $1,000,000 worth of government bonds to the public in a fractional reserve banking system (rrr<1), then the money supply:

The supply of bonds curve slopes upwards because

Suppose the government issues bonds to finance an increase in government spending. In the bond market,

If the Fed acts to increase the money supply,

If the Fed increases the discount rate, it is pursuing:

Action taken by the Fed to reduce the money supply will tend, all other things unchanged,

The rate of return that financial investors require to hold a risky asset minus the rate of return on a safe asset is called the:

A $100 bond, which matures in one year, has a price of $75. The interest rate on this bond is

The risk-free rate is:

If bond prices rise,

The interest rate on newly issued bonds is usually higher for bonds with ______ terms and ______ risk that the borrower will go bankrupt.

For a given level of reserves, an increase in the reserve requirement ratio will

An increase in the demand for bonds

A fall in the price of bonds may lead to a (an):

Which of the following decreases the demand for money?

What happens in the money market when there is an increase in the supply of money?

What happens in the money market when there is a decrease in the supply of money?

A lower real interest rate ______ saving and ______ consumption spending.