Exam 30: Monetary Policy: Conventional and Unconventional

Recessions are typically associated with increases on interest rates on risky securities coupled with increases on interest rates on Treasury securities.

Part of the reason that people confuse money and income is because

Why do economists insist on emphasizing the difference between money and income? Why is this difference important in macroeconomics?

The Federal Reserve Open Market Committee includes the seven members of the Board of Governors, presidents of five of the twelve district banks, and the Secretary of the Treasury.

The quantity of reserves supplied increases as interest rates rise because

In practice, money supply and short-term interest rates are determined by the

Assume that the banking system has $200 billion in reserves.There are no excess reserves in the system.If the reserve requirement is decreased from 10 percent to 8 percent, what will happen to the level of excess reserves in the system?

-In Table 13-1, if the required reserve ratio is 10 percent, what will happen to the money supply? Use the oversimplified money multiplier in your calculations.

The Federal Reserve Bank was modeled after the European Central Bank.

When the Fed wants to expand the money supply through open market operation, it

The actual control of the Federal Reserve System resides in the

The immediate impetus for the establishment of the Federal Reserve System came from

We should expect to see home construction activity decrease when interest rates increase.

The demand for reserves will increase at lower levels of GDP.

In Latin America, countries like Brazil and Mexico have found it necessary to grant their central banks more independence in order to

The current chair of the Federal Reserve System is

The Federal Open Market Committee oversees the money supply through the purchase and sale of government securities.

In making policies about the nation's money supply, the Federal Reserve Board

Interest rates declined in 2007.What happened to bond prices during this time?

Income is to money as