Monetary Policy and Multiple Choice Points

Topics: Monetary policy, Federal Reserve System, Inflation Pages: 8 (855 words) Published: November 26, 2013
Question 1 (5526021):
An easy money policy (low interest rates) will __________ the value of the dollar and increase exports from the United States, but will discourage foreign investment in the U.S. Type:
Multiple Choice
Points awarded:
0.00 / 1.00
Your Answer(s):
[No answer submitted]
Correct answer(s):
increase
maintain
decrease
none of the above

Question 2 (5526037):
According to _____________ , a “monetary rule” would be very constraining for the Fed and would only increase business cycles. Type:
Multiple Choice
Points awarded:
0.00 / 1.00
Your Answer(s):
Monetarists
Correct answer(s):
Monetarists
Keynesians
All the above
None of the above

Question 3 (5526023):
In the equation of exchange, M x V = P x Q, the V represents ___________________ Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
the average frequency with which a dollar is spent
Correct answer(s):
the average amount of money in circulation
the average frequency with which a dollar is spent
the average price level
quantity purchased

Question 4 (5525993):
The _________________ is the buying and selling of Treasury securities to influence the nation’s money supply. Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
federal open market operations
Correct answer(s):
setting of the reserve requirement
setting of the discount rate
federal open market operations
none of the above

Question 5 (5526035):
______________ believe that there is only a small amount of crowding-out if any at all. Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
Keynesians
Correct answer(s):
Monetarists
Keynesians
All the above
None of the above

Question 6 (5526013):
One reason that monetary policy is believed to be very significant is because it is largely isolated from political pressure. Type:
True or False
Points awarded:
1.00 / 1.00
Your Answer(s):
True
Correct answer(s):
True
False

Question 7 (5525989):
The Fed’s monetary policy tools indirectly impact the ability of financial institutions to create checkbook money through ____________. Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
making loans
Correct answer(s):
making loans
printing dollar bills
minting of coins
mining gold

Question 8 (5526032):
In contrast to the Monetarists, the Keynesians assume that the velocity of money varies directly with _______________. Type:
Multiple Choice
Points awarded:
0.00 / 1.00
Your Answer(s):
Money supply
Correct answer(s):
Government spending
the rate of interest
Money supply
the Trade deficit

Question 9 (5526003):
Raising the reserve ratio __________ the ability of banks to create money (make loans) and decreases a bank’s ability to make a profit. Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
decreases
Correct answer(s):
increases
decreases
does not change
none of the above

Question 10 (5526005):
The basic concepts for the Fed to implement an “tight money” policy would include Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
All the above
Correct answer(s):
Federal Reserve sells securities
Reserve ratio is increased
Discount rate is increased
All the above

Question 11 (5525992):
The “reserve requirement” varies according to the ______________________ and the type of deposit (checking, savings, etc.) Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
size of the financial institution
Correct answer(s):
amount of caffeine in the bloodstream
size of the financial institution
mood of the Fed each Monday morning
none of the above

Question 12 (5526038):
The _______________ school was very influencial during the Reagan Administration and continues to this day to be an important part of monetary considerations. Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
Monetarist...
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