Economics -- Chapter Ten

8 Questions | Attempts: 278
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  • 1/8 Questions

    Federal Reserve independence is

    • Completely fictitious
    • Totally complete
    • Subject to Congress's desire to keep it independent
    • Subject to the Supreme Court's desire to keep in independent
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About This Quiz

Final april 30,2012 at 8:00 am

Economics Quizzes & Trivia

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  • 2. 

    The Constitution of the United States grants to Congress the power of monetary policy in Article 1, Section 8. Since 1913, Congress has  

    • Jealousy guarded this power

    • Granted this power the the president

    • Delegated this power to the Federal Reserve

    • Ignored this power

    Correct Answer
    A. Delegated this power to the Federal Reserve
  • 3. 

    When engaging in monetary policy, the impact of expansionary policy on a aggregate demand aggregate supply model is to

    • Increase aggregate demand

    • Increase aggregate supply

    • Decrease aggregate demand

    • Decrease aggregate supply

    Correct Answer
    A. Increase aggregate demand
  • 4. 

    The "creation" of money is

    • Entirely the purview of Congress

    • Entirely the purview of the Federal Reserve

    • Formally the purview of the Federal Reserve, constitutionally the purview of Congress, but banks have a practical means of creating money

    • Entirely subject to the whims of the banking system

    Correct Answer
    A. Formally the purview of the Federal Reserve, constitutionally the purview of Congress, but banks have a practical means of creating money
  • 5. 

    Which of the following tools would have likely had the impact of raising short-term interest rates the most?

    • Cutting the federal funds target by one-quarter point

    • Buying $1-millions in bonds

    • Raising the reserve requirement from 8 percent to 15 percent

    • Raising personal income taxes rates by 1 percent-age point each

    Correct Answer
    A. Raising the reserve requirement from 8 percent to 15 percent
  • 6. 

    The ability of the Federal Reserve to control interest rates is

    • Limited almost entirely to short-term rates

    • Limited almost entirely to long-term rates

    • Limited almost entirely to intermediate-term rates

    • Unlimited

    Correct Answer
    A. Limited almost entirely to short-term rates
  • 7. 

    The most precise tool of monetary poolicy is

    • The adjustment of the federal target

    • The adjustment of the discount rate

    • The adjustment of the reserve requirement

    • The use of open-market operations

    Correct Answer
    A. The use of open-market operations
  • 8. 

    During 1999 through 2006 the Federal Reserve 

    • Was passive and simply let things happen

    • Reacted actively to quell potentially inflationary expansions but did nothing to deal with the recession

    • Reacted actively to deal with the recession but did nothing to quell potentially inflationary expansions

    • Reacted actively to deal with the recession and to quell potentially inflationary expansions

    Correct Answer
    A. Reacted actively to deal with the recession and to quell potentially inflationary expansions

Quiz Review Timeline (Updated): Mar 20, 2022 +

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  • Current Version
  • Mar 20, 2022
    Quiz Edited by
    ProProfs Editorial Team
  • Apr 30, 2012
    Quiz Created by
    Melkinsey2000
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