Exam 14: Monetary Policy

By buying bonds,the Fed decreases the quantity of reserves in the banking system and decreases the money supply.

The Federal Reserve banks clear checks between private banks,hold bank reserves,provide currency for banks,and make loans to private banks.

When the Fed sells bonds in the open market,interest rates _______ and aggregate demand shifts to the ______.

What is monetary policy and why is the monetary policy lever important?

Which of the following is responsible for holding bank reserves?

The Board of Governors has ___ members,and they are appointed for ___ year terms.

The Federal Reserve Board of Governors has:

Monetary policy involves the use of money and credit controls to impact the macroeconomy.

Answer the indicated question on the basis of the information in Table 14.2.Each question is based on the original balance sheet. -In Table 14.2,if the Fed changes the required reserve ratio to 25 percent,the lending capacity of the banking system will eventually:

Ceteris paribus,if the Fed raises the reserve requirement,then:

The discount rate is the interest rate charged by:

Members of the Federal Reserve Board of Governors are appointed for one fourteen-year term:

Which of the following will cause an increase in aggregate demand?

Given an upward-sloping aggregate supply curve,attempts to reduce unemployment through monetary policy will aggravate current inflation as illustrated by a:

Which of the following lends reserves to private banks?

The principal mechanism for directly changing the reserves of the banking system is:

Required reserves:

Keynesians believe a change in the money supply cannot lower the unemployment rate.

Open-market operations are the tool used least frequently by the Fed to alter the reserves of the banking system.

Which of the following is true about the chairman of the Federal Reserve Board of Governors?