1 5 pts Index funds Group of answer choices promise to beat the market provide a return that is in line with the CPI mimic a stock index and generally outcompete actively managed funds actively pick stocks Flag question: Question 2 Question 2 10 pts A stockholder a portion of a company, while a bondholder money to a corporation. Enter the verbs, in the boxes above, in lowercase only. DO NOT include spaces, period or other symbols. Flag question: Question 3 Question 3 10 pts Suppose a $1,000 bond you own earns 7% coupon a year. The competition offers a similar bond at a coupon rate of 6%. Question: Calculate the market price of your bond. Enter your answer in the box below. Round your answer to two decimals (e.g. if your answer is $857.825, enter 857.83). DO NOT include $ sign or other symbols. Flag question: Question 4 Question 4 5 pts Refer to the accompanying figure. Point B, and D are known as Economic cycles chart Enter only lowercase answers in the box above. One word answer is acceptable! Flag question: Question 5 Question 5 5 pts An economy above equilibrium experiences a(n) Group of answer choices none of the above retreat expansion recession Flag question: Question 6 Question 6 5 pts Suppose a country's natural rate of unemployment is 2 percent and potential output equals $100 billion. Question: Calculate the output gap If the actual unemployment rate is 2 percent Enter your answer in the box below. DO NOT include any $ signs or other symbols (e.g. if your answer is $10,000,000, only enter 10 and exclude the millions) Flag question: Question 7 Question 7 5 pts Okun's law states the relationship between Group of answer choices the money supply and the velocity of money unemployment and inflation unemployment and output frictional unemployment and structural unemployment Flag question: Question 8 Question 8 5 pts Monetary policy is conducted by Only lowercase answers. Two-word answers are acceptable, but not required! Flag question: Question 9 Question 9 5 pts Two examples of automatic stabilizers include and Only lowercase answers. Two-word answers are acceptable, but not required! Flag question: Question 10 Question 10 5 pts The overnight interest rate that commercial banks charge each other is known as the Only lowercase answers. Two-word answers are acceptable, but not required! Flag question: Question 11 Question 11 5 pts The interest rate that the fed charges commercial banks is known as the Only lowercase answers. Two-word answers are acceptable, but not required! Flag question: Question 12 Question 12 10 pts Suppose $100 is held by the public, banks hold $200 in reserves, and the reserve ratio is 10 percent. Question: Calculate the money supply if commercial banks borrow $50 in reserves from the Fed through discount lending window and the public maintains the same amount of currency it currently holds Enter your answer below. DO NOT include any symbols and round to the nearest decimal (e.g. enter 1001 if your answer is $1,000.66) Flag question: Question 13 Question 13 5 pts Refer to the graph below Money demand, money supply and nominal interest rate Suppose the Federal Reserve targets a nominal interest rate at 7 percent. it must conduct open market ________ to set the money supply at ________ Group of answer choices purchases; 300 sales; 500 sales; 300 purchases; 700 Flag question: Question 14 Question 14 5 pts High inflation, high unemployment and slow, or negative, economic growth is known as Enter your answer below only in lowercase. One-word answer is acceptable, but not required! Flag question: Question 15 Question 15 10 pts Refer to the accompanying figure. Aggregate demand and aggregate supply curves. Question: Starting from long-run equilibrium at point A, a one-time tax cut increases aggregate demand from AD to AD' will lead to a short-run equilibrium at point ________ creating ________ gap, and eventual long-run equilibrium to point _________. Group of answer choices C; expansionary; A C; an expansionary; B C; no output; C A; a recessionary; C Flag question: Question 16 Question 16 5 pts The current U.S. economy has faced a sharp increase in inflation. Among the unconventional tools the Fed undertook include Group of answer choices mortgage backed securities purchases expansionary monetary policy bank access to the discount window mortgage backed securities sales Flag question: Question 17 Question 17 5 pts Refer to the accompanying graph Aggregate demand and aggregate supply curves. An adverse inflation shock, in the short term, will cause the Group of answer choices firms to keep their prices unchanged, in the long run, to increase consumption prices to move along the AD curve from point A to point B AD curve to shift from point A to point C, leading to higher inflation output to remain constant as it is a short term shock Flag question: Question 18 Question 18 5 pts The actions that the Federal Reserve took during the shutdown include Group of answer choices conduct contractionary monetary policy to aggressively stimulate the economy increase the money supply and extend lending to small and large enterprises decrease the money supply and extend lending to small and large enterprises none of the answers Flag question: Question 19 Question 19 5 pts Refer to the accompanying graph. The Fed has revisited the 2 percent inflation target and widened its range. Among the reasons include: U.S. Inflation Group of answer choices promoting flexible monetary policy self correction of the economy reduction in the fed funds rates increased in stock purchases Flag question: Question 20 Question 20 5 pts Refer to the accompanying graph. Why did the Fed resort to quantitative tightening or easing? Charts of the Fed balance sheet. Group of answer choices conventional monetary policy reached its bound the Fed wanted to surprise the markets none of the above the Fed was incompetent Flag question: Question 21 Question 21 5 pts The Fed recent rate hiking is the most significant since the 1980s. Such a series of rapid hikes will have a significant impact on the banking system because: Group of answer choices a golden opportunity of bank profits an increase in economic activity a lower credit card rates and mortgage rates a fundamental restructuring of the global financial system is required Flag question: Question 22 Question 22 10 pts Assume the following economic indicators: PAE = 1,010 -1,500r+ 0.5 Y interest rate is 10% short-run equilibrium output is $4,800 potential output is $4,500 multiplier of 5 Question: Calculate the fed funds rate that the Fed should target Round your answer (e.g. if your answer is 0.546, only enter 0.55). DO NOT include any $ sign, commas or other symbols. Saving... Time Running