Exam 22: Monetary Policy

Which of the following is an intermediate target of the Fed's policies?

The supply curve of U.S.dollars in the foreign exchange market is:

The money supply function reflects a positive relationship between the interest rate and the quantity of money supplied.

The Fed controls the money supply to achieve the policy goals set by the United States International Trade Commission.

The Federal Reserve System divides the U.S.into _____ districts.

The Board of Governors of the Federal Reserve is:

Which of the following government agencies oversees monetary policy in the U.S.?

Other things equal, an increase in the general price level causes the money demand function to shift to the left.

Suppose that the Fed decides to decrease the money supply by 0.87 percent.If the velocity of money is constant, then the quantity theory of money predicts that:

If you believe that the price of U.S.government bonds will soon fall, you will want to increase your speculative money demand.

Assume that the Fed increases the money supply when there is substantial unemployment in the economy.According to the quantity theory of money, if velocity is constant, then:

When a bank's excess reserves are zero:

The Fed controls the money supply in the U.S.economy largely through its ability to influence bank reserves and the money creating power of commercial banks.

Inflation targeting usually increases the uncertainty about the course of action of central banks, as perceived by the general public.

An individual who holds some of her wealth in the form of money in order to pay rent and buy groceries is illustrating the transactions demand for money.

The Fed usually sets a higher reserve requirement for savings accounts than for checking accounts.

When the Federal Open Market Committee buys government securities:

The "secondary credit" of the discount rate is usually lower than the "primary credit, " because it is intended for banks in good financial condition.

The Federal Open Market Committee consists of:

If you buy for $100 a bond that pays 4.57 percent in annual interest and the current interest yield on the bond rises to 5.13 percent, then the price of the bond has fallen.