22. Without any changes in the flow of funds or the level of funds at the banks, a decrease in the reserve requirement will: a. increase required reserves b. decrease excess reserves c. increase excess reserves d. decrease total reserves.

23. If I stated that the portfolio of federal bonds amassed during 2009 swell(ed) about doubling, then this would be in contrast to the FEDs initial action to the 2007 crisis when we saw a different change on the FEDs balance sheet. Which of the following reflects these contrasting actions best. In reaction to the 2007-2008 crisis: a. the FED expanded the money supply without expanding either the Loan or Security Portfolio on its balance sheet. b. the FED forced gold prices to record prices to provide the collateral to print additional money. c. the FED increased its security holdings associated with repos, acceptances, foreign securities, and foreign currencies. d. the FED sold Treasuries from its portfolio and expanded loans to record high amounts.

24. People who fear the FED is stoking inflation to stimulate the economy fear: a. rapid employment growth will shrink the wealth gap reported over the past 20 years; b. increased funds available in the US will be used to purchase overseas products harming our global competitiveness; c. that the FED will not be able to time, recognize and/or control the removal of over-expansionary funds in the system, causing significant inflation in the future; d. their wealth will disappear in the lowering of the tax structure to repay the debt.

25. The statement that Mr. Friedman argued that the FED could have prevented the Depression, and he rejected the Keynesian doctrine of using government spending to stimulate demand, implies that Mr Friedman is: a. in favor of the use of monetary policy to resolve economic challenges, but not fiscal policy. b. in favor of the use of fiscal policy to resolve economic challenges, but not monetary policy. c. in favor of using both fiscal policy and monetary policy simultaneously and in coordination with each other to resolve economic challenges. d. in favor of no government or agency (FED) interference with the operation of the free market.