Exam 5: Policy Makers and the Money Supply

Which of the following statements is false?

In an effort to stimulate economic activity,Congress and the president passed the $787 billion _________________________________ in February,2009 with the funds to be used to provide tax relief,appropriations,and direct spending.

The "perfect financial storm" that developed in 2008,which put the U.S.economy was on the verge of collapse was characterized by all of the following EXCEPT:

Currency in the form of Federal Reserve notes are primarily backed by gold certificates and eligible paper.

The government entity responsible for fiscal policy is:

The United States economy has little influence on the economies of other nations.

Government financing of large budgetary deficits:

Examples of automatic stabilizers are:

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

The Federal Reserve System cannot directly control:

Changes in the growth rates for money supply and money velocity affect the growth rate in:

Deposits that add new reserves to the bank where they are deposited are called:

Bank reserves are increased when the Treasury:

The U.S.government may influence monetary and credit conditions indirectly through taxation and expenditure programs.

Under required reserves of 20%,the maximum to which the money supply could be expanded by the banking system is:

In our financial system,the money multiplier:

The federal government pays for the services it provides primarily through:

To equal M1 money supply,the monetary base:

Debt management by the federal government includes:

The President of the United States has no influence over the Federal Reserve System nor exerts any pressure on the Fed.