Exam 5: Monetary Policy

One reason that a stimulative monetary policy might fail is that savers such as retirees who rely on interest income to meet their expenses may have to reduce their spending.

A weak dollar can stimulate ____, discourage ____, and ____ the U.S. economy.

The Federal Reserve would be most inclined to use a stimulative monetary policy to cure a recession if oil prices are

When the Fed wants to encourage businesses to increase their spending on long-term projects, it may use a stimulative policy focused on reducing long-term Treasury yields.

Which of the following is NOT an indicator of inflation?

Which of the following best describes the relationship between the Fed and the presidential administration?

The ____ indicators tend to rise or fall after a business cycle.

____ serves as the most direct indicator of economic growth in the United States.

There is some evidence that high money supply growth may lead to _______ U.S. inflation over time, which in turn places ____ pressure on U.S. interest rates.

Costner National, a commercial bank, obtains short-term deposits and makes long-term fixed-rate loans. It should be adversely affected when the Fed

Financial institutions such as commercial banks, bond mutual funds, insurance companies, and pension funds maintain large portfolios of bonds, so their portfolios are ____ affected when the Fed ____ interest rates.

A purchase of Treasury securities by the Fed leads to a(n)____ in interest rates and a(n)____ in the level of business investment.

In general, there is

Which of the following is NOT a reason that a stimulative monetary policy may be ineffective?

Which of the following might be monitored as an indicator of inflation?

The Fed's monetary policy is primarily intended to regulate commercial loans.

If the Fed attempts to reduce inflation, it would likely increase money supply growth.

Inflation is commonly the result of a

The Fed normally controls the money supply by buying and selling ________.

A credit crunch occurs when