Economics -- Chapter Ten

8 Questions | Total Attempts: 277

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Economics Quizzes & Trivia

Final april 30,2012 at 8:00 am


Questions and Answers
  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

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