Exam 26: Monetary Policy

When the Fed embarked on a policy known as quantitative easing,they

With the federal funds rate near zero and the economy still struggling,In response to already low interest rates doing little to stimulate the economy,the Fed began buying 10-year Treasury notes and certain mortgage-backed securities to keep interest rates low.This policy is known as

By the 2000s,an important change in the mortgage market had occurred when ________ became significant participants in the secondary market for mortgages.

Inflation targeting is a framework for carrying out monetary policy whereby

When calculating GDP,the Bureau of Economic Analysis revises its quarterly data

Lowering the interest rate will

Although the Federal Reserve had traditionally made discount loans only to ________,in response to the financial crisis in 2008 the Fed made primary dealers eligible for discount loans as well.

When the Fed uses contractionary policy

The ability of the Federal Reserve to use monetary policy to affect economic variables such as real GDP ultimately depends upon its ability to affect

List the Fed's four main monetary goals.

Changes in the federal funds rate usually result in

For purposes of monetary policy,the Federal Reserve has targeted the interest rate known as the

Inflation rates during the years 1979-1981 were the highest the United States has ever experienced during peacetime.

Use the money demand and money supply model to show graphically and explain the effect on interest rates of the Federal Reserve's open market sale of Treasury securities.

The Federal Reserve could target both the money supply and the interest rate at the same time if it controlled money demand along with money supply.

Despite saving Lehman Brothers from failing,the Fed and the Treasury decided to allow Bear Stearns to go bankrupt,which it did in September,2008.

Federal Reserve Board Chairmen Paul Volcker,Alan Greenspan,and Ben Bernanke all have focused on which of the following as their main goal of monetary policy?

Figure 26-11 -Refer to Figure 26-11.In the dynamic model of AD-AS in the figure above,the economy is at point A in year 1 and is expected to go to point B in year 2,and the Federal Reserve pursues policy.This will result in

Figure 26-10 -Refer to Figure 26-10.In the figure above,suppose the economy is initially at point A.The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Federal Reserve?

The leader of the monetarist school and major proponent of a monetary growth rule was