Economics -- Chapter Ten
Final april 30,2012 at 8:00 am
- 1.
The Constitution of the United States grants to Congress the power of monetary policy in Article 1, Section 8. Since 1913, Congress has
- A.
Jealousy guarded this power
- B.
Granted this power the the president
- C.
Delegated this power to the Federal Reserve
- D.
Ignored this power
Correct Answer
C. Delegated this power to the Federal Reserve -
- 2.
When engaging in monetary policy, the impact of expansionary policy on a aggregate demand aggregate supply model is to
- A.
Increase aggregate demand
- B.
Increase aggregate supply
- C.
Decrease aggregate demand
- D.
Decrease aggregate supply
Correct Answer
A. Increase aggregate demand -
- 3.
The most precise tool of monetary poolicy is
- A.
The adjustment of the federal target
- B.
The adjustment of the discount rate
- C.
The adjustment of the reserve requirement
- D.
The use of open-market operations
Correct Answer
D. The use of open-market operations -
- 4.
Federal Reserve independence is
- A.
Completely fictitious
- B.
Totally complete
- C.
Subject to Congress's desire to keep it independent
- D.
Subject to the Supreme Court's desire to keep in independent
Correct Answer
C. Subject to Congress's desire to keep it independent -
- 5.
The "creation" of money is
- A.
Entirely the purview of Congress
- B.
Entirely the purview of the Federal Reserve
- C.
Formally the purview of the Federal Reserve, constitutionally the purview of Congress, but banks have a practical means of creating money
- D.
Entirely subject to the whims of the banking system
Correct Answer
C. Formally the purview of the Federal Reserve, constitutionally the purview of Congress, but banks have a practical means of creating money -
- 6.
During 1999 through 2006 the Federal Reserve
- A.
Was passive and simply let things happen
- B.
Reacted actively to quell potentially inflationary expansions but did nothing to deal with the recession
- C.
Reacted actively to deal with the recession but did nothing to quell potentially inflationary expansions
- D.
Reacted actively to deal with the recession and to quell potentially inflationary expansions
Correct Answer
D. Reacted actively to deal with the recession and to quell potentially inflationary expansions -
- 7.
The ability of the Federal Reserve to control interest rates is
- A.
Limited almost entirely to short-term rates
- B.
Limited almost entirely to long-term rates
- C.
Limited almost entirely to intermediate-term rates
- D.
Unlimited
Correct Answer
A. Limited almost entirely to short-term rates -
- 8.
Which of the following tools would have likely had the impact of raising short-term interest rates the most?
- A.
Cutting the federal funds target by one-quarter point
- B.
Buying $1-millions in bonds
- C.
Raising the reserve requirement from 8 percent to 15 percent
- D.
Raising personal income taxes rates by 1 percent-age point each
Correct Answer
C. Raising the reserve requirement from 8 percent to 15 percent -
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Apr 30, 2012Quiz Created by
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