1. Prior to the Great Recessionthe Federal Reserve followed a restricted reserves policy. a. True b. False QUESTION 2. When the economy has a negative GDP gap. a. Potential GDP exceeds actual GDP b. Potential GDP equals actual GDP c. Potential GDP is less than actual GDP. d. There is not enough information . QUESTION 3. Prior to the Jerome Powellwho was the chair of the Federal Reserve Board of Governors? Hint: President-elect Biden has nominated this person to serve as Treasury Secretary, a. Ben Bernanke b. Alan Greenspan c. Jerome Powell d. Janet Yellen QUESTION 4 Which of the following statements best describes the Fed's dual mandate? a. stable financial system and stable inflation at 2% b. maximum employment and inflation of 0% c. maximum employment and stable long-run inflation of 2% d. Full employment that is unemployment rate of 4%, and low, stable inflation. QUESTION 5 Which of the following was the primary tool of monetary polty under a restricted reserves regime? a. Discount lending b. Setting the required reserve ratio c. open market operations d. interest payments on reserves at the Federal Reserve. QUESTION 6 What is the difference between forward guidance and time consistency? Why are they important? QUESTION 7 If the economy is able to self-correct a positive GDP gap, why might the Fed wish to intervene in the market