Question
1) If the Fed is targeting interest rates, during an economic downturn it will avoid open market operations so as not to interfere with the
1) If the Fed is targeting interest rates, during an economic downturn it will
avoid open market operations so as not to interfere with the adjustment of interest rates
use open market sales to raise interest rates
impose limitations on the interest rates banks may charge on credit cards
use open market purchases to lower interest rates
2) Increases in which of the following items from the Fed's balance sheet will result in decreases in the monetary base?
U.S. Treasury deposits
U.S. Treasury currency outstanding
Federal Reserve float
discount loans
3) Under a rules strategy for monetary policy, the Fed would
adjust monetary policy as it sees fit
target the growth rate ofM2but not the growth rate ofM1
follow specific and publicly announced guidelines for policy
target the growth rate ofM1but not the growth rate ofM2
4)Which of the following isnottrue of the expectations theory?
It assumes that instruments with different maturities are perfect substitutes.
It implies that a long-term bond rate equals the average of short-term rates covering the same investment period.
It implies that the shape of the yield curve depends on the expected pattern of future short-term rates.
It implies that the yield curve will usually slope upward
I have gotten different answers for each one. Can someone tell me which is correct?
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