All Matches

Solution Library

Expert Answer

Textbooks

Search Textbook questions, tutors and Books

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Tutors
Study Help
Hire a Tutor
AI Study Help New

Search
Sign In
Register

study help
business
foundations of economics

Questions and Answers of Foundations Of Economics

The monetarists criticized . ( LO5 )a) the stop-and-go policies of the Federal Reserveb) the ineffectiveness of monetary policy at fi ghting infl ationc) the importance given to money by the
The monetary rule states that . ( LO5 )a) the federal budget must be balanced every yearb) the money supply must increase at the same rate as the price levelc) the money supply must remain a constant
Which of the following is a basic proposition of monetarism? ( LO5 )a) The key to stable economic growth is a constant rate of increase in the money supply.b) Expansionary monetary policy will
During a recession, if the money supply were increased . ( LO4 , 5 )a) the Keynesians and the monetarists agree that people would probably just hold on to these fundsb) the Keynesians and the
To the monetarists, the most important thing was. ( LO5 )a) the rate of growth of the money supplyb) balancing the federal budgetc) raising the federal government’s tax based) giving the Federal
Big government was ushered in during the. ( LO4 )a) 1920sc) 1960sb) 1930sd) 1980s
Classical economics lost most of its popularity in. ( LO3 )a) the 1920sc) the 1960sb) the 1930sd) the 1980s
The key to investment spending, said Keynes, was. ( LO4 )a) the interest rateb) the expected profi t ratec) foreign spendingd) government spending
Keynes believed budget defi cits were. ( LO4 )a) to be avoided at all costsb) bad during recessionsc) good during recessionsd) good all the time
According to Keynes, was necessary to get us out of a depression. ( LO4 )a) investment spendingb) consumer spendingc) foreign spendingd) any kind of spending
The problem during recessions, said John Maynard Keynes, was . ( LO4 )a) inadequate aggregate supplyb) inadequate aggregate demandc) too much infl ationd) too much government intervention
The classicals believed recessions were. ( LO3 )a) impossibleb) potential depressionsc) temporaryd) hard to end without government intervention
The classical economists believed . ( LO3 )a) both wages and prices were downwardly fl exibleb) neither wages nor prices were downwardly fl exiblec) wages, but not prices, were downwardly fl exibled)
According to the classical economists, if the quantity of money that people wanted to save was greater than the amount that people wanted to invest,. ( LO3 )a) there would be a recessionb) there
Say’s law states that . ( LO3 )a) supply creates its own demandb) demand creates its own supplyc) demand will always exceed supplyd) supply will always exceed demand
Practical Application: As the last living believer in the crude quantity theory of money, you need to deal with a ruinous annual defl ation rate of 10 percent. What simple economic measure would you
Practical Application: As academic dean, you have full control of your college’s registration process. Using what you’ve learned from the book Nudge by Thaler and Sunstein, how would you get
Practical Application: Outline the conventional monetary and fi scal policies for fi ghting an infl ation. Then outline the conventional monetary and fi scal policies for fi ghting a recession. Why
When a recession begins, if the federal government spent tens of billions of dollars on a highway building program and consequently ran a large defi cit, how would this fi scal policy measure be
Is there any consensus among at least some of the different schools of economic thought with respect to the effectiveness of monetary and fi scal policy?
What is the monetary rule and why is it favored by the monetarists?
According to John Maynard Keynes, what was the basic problem during recessions, and what was his solution?
Use the information in Table 1 to fi nd this bank’s required reserves. ( LO2 ) TABLE 1 Checking deposits: $1 billion Time deposits: $300 million
How much reserves would a bank have to hold on:(a) $1 billion of time deposits that will mature in less than 18 months? (b) $1 billion of time deposits that will mature in more than 18 months? (Hint:
If a bank has reserves of $100 million and checking deposits of $700 million, how much are the bank’s:(a) required reserves? (b) excess reserves? ( LO2 )
Approximately how much in reserves does a bank with$5 billion in demand deposits have to hold? ( LO2 )
If a bank has reserves of $21 million and demand deposits of $200 million, how much are the bank’s:(a) required reserves? (b) excess reserves? ( LO2 )
How much is the effective, or market, interest rate on a bond that has a face value of $1,000 and a selling price of $1,200 and that pays $120 interest? ( LO5 )
Using your answer from the previous problem, if the Federal Reserve increased bank reserves by$100 million, by how much would the money supply rise? ( LO2 )
If the reserve requirement were 15 percent, how much would the deposit multiplier be? ( LO2 )
If you ran a bank with checking deposits of$400 million, you would need to hold reserves of a little less than how much (assuming you don’t remember the cutoff point)? ( LO2 )
If you ran a bank with checking deposits of$20 million, you would need to hold reserves of how much? (Use Table 1 on page 340.) ( LO2 )
It has been much easier for the Fed to fi ght than _______________ . ( LO6 )
If the Fed wants to increase the money supply, it will follow these two steps: (1) _______________ ; (2) _______________ ; and if these do not prove suffi cient, it may _______________ . ( LO5 )
All reserves pay an interest rate of _______________ percent. ( LO2 )
Time deposits are subject to no reserve requirement because _______________ . ( LO2 )
At the present time, nearly all checking deposits are subject to a legal reserve requirement of _______________ percent. ( LO2 , 5 )
Control of the Federal Reserve is held by _______________ . ( LO1 )
According to Keynes’s liquidity trap, at very low interest rates, people would _______________ . ( LO4 )
Our currency is backed by _______________ . ( LO1 )
Our paper currency is issued by_______________ . ( LO1 )
The main reason why the Fed began paying interest on bank reserves was to . ( LO6 )a) provide the banks with an incentive to continue holding excess reserves on deposit at their Federal Reserve
Which one of the following was a major initiative of the Obama administration to deal with home mortgage foreclosures? (LO10)a) TARPb) A federal funds rate of virtually zeroc) A $275 billion program
TARP . (LO10)a) saved millions of homeowners from defaulting on their mortgagesb) provided funds which enabled banks to expand their lendingc) provided a much needed infusion of funds to hundreds of
Which one of following is the most accurate statement? (LO10, 11)a) Ben Bernanke was much more effective in averting a fi nancial meltdown than in preventing the real estate bubble.b) Ben Bernanke
Who should be held the least responsible for the real estate bubble and the subsequent fi nancial crisis? (LO9, 10, 11)a) Alan Greenspanb) Ben Bernankec) President George W. Bushd) President Barack
Which is the most accurate statement? ( LO9 )a) The Fed’s actions in dealing with the 2008 fi nancial crisis may encourage future risky fi nancial behavior, since a future crisis will be met with
To deal with the fi nancial crisis of 2008 the Fed resorted primarily to . ( LO9 )a) traditional policy weapons used to fi ght infl ationb) traditional policy weapons used to fi ght recessionsc)
The main players in the shadow banking system are. ( LO9 )a) the large commercial banksb) the smaller banksc) investment banks, hedge funds, and brokerage housesd) foreign investors
The primary objective of the Fed in mid–2008 was to. ( LO9 )a) avert a fi nancial meltdownb) enable millions of subprime borrowers to keep their homesc) tamp down infl ationd) prevent a recession
Bank deposit creation is limited by . ( LO4 )a) reserve requirementsb) the interest ratec) whether a bank is nationally or state charteredd) whether a bank is in a large city or a rural area
Money is created when someone . ( LO4 )a) takes out a bank loanb) pays back a bank loanc) spends moneyd) saves money
A decrease in the rate of growth in the money supply will tend to interest rates and the level of investment. ( LO4 )a) raise, raiseb) lower, lowerc) lower, raised) raise, lower
The subprime lending mess was caused by ( LO9 )a) the lowered lending standards of mortgage brokers.b) the Federal Reserve’s lowering of interest rates.c) both the lowered lending standards of
Which would be the most accurate statement? ( LO1 )a) The Federal Reserve Board of Governors has more power than the monetary authorities of any other country.b) The Deutsche Bundesbank has more
Faster monetary growth tends to . ( LO4 )a) lower interest rates, leading to lower investmentb) lower interest rates, leading to higher investmentc) raise interest rates, leading to lower
If the equilibrium rate of interest is 7 percent and market price of a U.S. government bond is $1,000, what is the most likely interest rate and bond price if the Fed increases the money supply by a
The repeal of Glass-Steagall in 1999. ( LO7 )a) had the objective of allowing banks, securities fi rms, and insurance companies to merge and to sell each others’ productsb) will result in a huge
Which of the following is the most accurate statement? ( LO5 )a) We will have a checkless economy before 2012.b) Your bank must return the checks you wrote with your monthly statement.c) The Fed uses
The limits set by law for reserves on checking accounts are between . ( LO2 , 5 )a) 0% and 9%b) 3% and 12%c) 8% and 14%d) 12% and 18%
Which is the most accurate statement? The Federal Reserve . ( LO5 )a) markets new Treasury bills, notes, certifi cates, and bondsb) runs a check clearing operation for U.S.government checks, but does
Statement 1: Currency leakages take place especially during times of recession and low interest rates.Statement 2: The process of check clearing is being partially replaced by the electronic
Suppose that the deposit expansion multiplier were 7.After taking into account its three modifi cations, we might estimate the true deposit multiplier to be. ( LO3 )a) 14d) 4b) 9e) 1c) 7
Reserve requirements are changed . ( LO2 )a) once a weekb) three or four times a yearc) once every two or three yearsd) once every ten or fi fteen yearse) only if Congress passes a new law
One of the main results of the Depository Institutions Deregulation and Monetary Control Act of 1980 may be to . ( LO7 )a) lessen the number of fi nancial institutions in the United Statesb) increase
The main job of the Fed is to . ( LO6 )a) control the rate of growth of the money supplyb) manage the national debtc) provide low-interest loans to all fi nancial institutionsd) raise and lower tax
The Depository Institutions Deregulation and Monetary Control Act of 1980 had three key provisions, one of which was . ( LO7 )a) uniform reserve requirements for all fi nancial institutionsb) zero
Which statement is true? ( LO6 )a) The Fed is more effective at fi ghting infl ation than fi ghting recession.b) The Fed is more effective at fi ghting recession than fi ghting infl ation.c) The Fed
Which one of the following is the most accurate statement? ( LO8 )a) The impact lag of monetary policy is considerably shorter than the impact lag of fi scal policy.b) The recognition lag of monetary
Which statement is the most accurate? ( LO5 )a) The Federal funds rate and the discount rate rise and fall together.b) The prime rate of interest is usually about a half percentage point below the
To buy securities, the Fed offers . ( LO5 )a) a low price and drives up interest ratesb) a low price and drives down interest ratesc) a high price and drives up interest ratesd) a high price and
When the Fed wants to increase the money supply, it. ( LO5 )a) raises the Federal funds rateb) raises reserve requirementsc) sells securitiesd) buys securities
Open-market operations are . ( LO5 )a) the buying and selling of U.S. government securities by the Fedb) borrowing by banks from the Fedc) the selling of U.S. government securities by the U.S.
Check clearing is done by . ( LO1 , 2 )a) the bank where a check is depositedb) the bank on which a check is writtenc) the Federal Reserve Systemd) the comptroller of the currency
Each of the following is a leakage from the deposit expansion multiplier except . ( LO3 )a) cashb) the foreign trade imbalancec) excess reservesd) all of these are leakages
The larger the reserve requirement, the. ( LO2 )a) smaller the deposit expansion multiplierb) larger the deposit expansion multiplierc) easier it is for banks to lend money
Which of these is a secondary reserve? ( LO2 )a) Treasury billsb) goldc) vault cashd) deposits at the Federal Reserve District Bank
Legal reserve requirements are changed. ( LO2 )a) very oftenb) on rare occasionsc) neverd) none of these
Basically the Board of Governors is. ( LO1 )a) independentb) dependent on the president and Congressc) powerlessd) on a par with the District Banks
Control of the Federal Reserve System is vested in. ( LO1 )a) the presidentb) Congressc) the Board of Governorsd) the District Banks
A liquidity trap most likely will occur when. ( LO6 )a) there is a severe recession and interest rates are relatively highb) there is a severe recession and interest rates are relatively lowc) there
Monetary policy is conducted by . ( LO1 )a) the president onlyb) Congress onlyc) the president and Congressd) the Federal Reserve
To restrict monetary growth, the Federal Reserve will. ( LO5 )a) raise the Federal funds rate and sell securitiesb) raise the Federal funds rate and buy securitiesc) lower the Federal funds rate and
The most important Federal Reserve policy weapon is. ( LO5 )a) changing reserve requirementsb) changing the discount ratec) moral suasiond) open-market operations
Which statement is true? ( LO1 )a) The United States has always had a central bank.b) The United States has never had a central bank.c) The United States had a central bank until 1913.d) The United
Fiscal and monetary policy have . ( LO1 )a) the same means and endsb) different means and endsc) the same means and different endsd) different means and the same ends
Web Activity: What is the current interest rate paid by the Fed on reserves held at Federal Reserve District Banks? Go to www.federalreserve.gov/monetarypolicy
Practical Application: How well has the Fed done in pursuing its main policy goals since Ben Bernanke became chairman in January 2006?
How is money created and destroyed? Explain the concept of the money multiplier, and discuss the factors that infl uence its size.
What monetary policy tools should the Fed use to achieve the result you recommended in question 8?
What is the current macroeconomic situation in the United States? What should the Fed do about it?
In 1980 and in 1999 two major banking laws were passed. Explain how each law affects bank consolidation.
Why has the power to set the discount rate become a less effective monetary policy tool over the last eight decades?
Draw a diagram showing the impact on bond prices, interest rates, and the level of investment of (a) an expansionary monetary policy; (b) a contractionary monetary policy.
What are open-market operations? How are they conducted to fi ght infl ation and recession?
What is the most important job of the Federal Reserve? What makes it so important?
Is the Federal Reserve more effective in fi ghting recessions or infl ations? Explain your answer, if possible, using a fl ow chart.
State numerically what would happen to M1 if:(a) Ashley Whittingham brought $1,000 to her bank and deposited it in her checking account;(b) Nicolas Gindorff took $500 out of his checking account and
( LO3 )
Initially M1 is 1,000 and M2 is 4,000. Find the size of M1 and M2 if demand deposits rise by

Showing 400 - 500 of 5192

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last

Services

Sitemap
Fun
Definitions
Become Tutor
Study Help Categories
Recent Questions
Expert Questions

Company Info

Security
Copyrights
Privacy Policy
Terms & Conditions
SolutionInn Fee
Scholarship

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Campus Ambassador

Secure Payment

Download Our App

© 2024 SolutionInn. All Rights Reserved