Exam 5: Policy Makers and the Money Supply

Federal Reserve open market operations

Which of the following statements is false?

Open market operations differ from discounting operations in that they are

Inflation occurs when an increase in the price of goods or services is more than offset by an increase in quality.

Moderate employment is one of the three general goals of U.S. economic policy actions.

In fall 2008, the U.S. Congress and President George W. Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

Freddie Mac was on the verge of financial insolvency and possible collapse in mid-2008.

The U.S. Treasury is primarily responsible for

Continuing federal programs that stabilize economic activity are called

A country's economic policy actions are directed toward which of the following goals?

Bank reserves are not affected by

Occurs when tax revenues are less than expenditures.

Assume that a bank receives a primary deposit of $1,000, and the reserve requirement is 15%. Which of the following would reflect the asset side of the balance sheet after a maximum loan amount has just been made?

To manage Treasury's cash flow is one of three debt management goals for the Treasure.

Welfare payments are an automatic stabilizers.

The government entity responsible for fiscal policy is

U.S. economic policy actions are directed toward the three general goals of economic growth, high employment, price stability, and balance in international transactions.

Although the Treasury has vast power to affect the supply of money and credit, the Treasury largely limits its actions to taxing, borrowing, paying bills, and refunding maturing obligations.

Various programs of the federal government help stabilize disposable income, and in turn, economic activity in general. In so doing,

The President of the United States and the Fed formulate a program of fiscal policy.