8.(TCO 2) Who has a permanent vote on the FOMC?(Points : 4)

President of theFederal Reserve Bank of New York Federal Advisory Council President of theFederal Reserve Bank of San Francisco Congress

Question 9.9.(TCO 2) An increase in Federal Reserve float(Points : 4)

decreases bank reserve deposits in the Fed. increases bank reserve deposits in the Fed. has no impact upon bank reserves deposits in the Fed. reduces the net loan granted by the Fed to member banks.

Question 10.10.(TCO 2) If the Fed wanted to increase the money supply immediately but just slightly, it would most likely______.(Points : 4)

buy securities on the open market lower the Discount Rate lower reserve requirements Any of the above would be suitable for this purpose.

Question 11.11.(TCO 3) Unemployment should fall if______.(Points : 4)

wages increase and people expect prices to rise as well wages increase and people expect prices to be stable interest rates rise more than prices are expected to rise the money supply increases

Question 12.12.(TCO 3) Monetary policies directed toward increased economic growth may have what impact upon the value of the dollar in relation to other currencies?(Points : 4)

Increase Decrease No effect None of the above

Question 13.13.(TCO 3) The "tools" of monetary policy, whether "viable" or not, include all the following except______.(Points : 4)

changing the discount rate open market operations changes in reserve requirements changes in the Federal Funds rate

Question 14.14.(TCO 3) Monetarists and Keynesians agree that______.(Points : 4)

monetary policy influences the real sector changes in the money supply drive changes in interest rates changes in interest rates drive changes in the money supply monetary policy does not influence the real sector

Question 15.15.(TCO 2, 3) Which of the following was not a responsibility of the early Federal Reserve?(Points : 4)

Replace the National Banking system Improve the payments system Establish more rigorous bank supervision Act as "lender of last resort"

Question 16.16.(TCO 4) Which of the following statements about interest rates is incorrect?(Points : 4)

Bond prices and interest rates change inversely with one another. The expected rate of inflation affects current market interest rates. Short-term interest rates are not as volatile as long-term interest rates. Interest rates are directly related to the level of output in the economy.

Question 17.17.(TCO 4) Interest rates should increase if(Points : 4)

the economy is in a boom. inflationary expectations have decreased. the Federal Reserve has decreased M1 and the supply of loanable funds. inflationary expectations have increased.

Question 18.18.(TCO 4) Interest rates move ______ with expected inflation and _____ with economic activity.(Points : 4)

directly; inversely inversely; inversely directly; directly inversely; directly

Question 19.19.(TCO 4) If nominal interest rates are 10% and expected inflation is 5%,______.(Points : 4)

actual inflation exceeds 10% the real rate of interest is 5% market rates are expected to increase to 15% expected interest rates are 5%

Question 20.20.(TCO 4) With the real rate at 5%, most loans were made at 10% last year. This year, interest rates have declined to 8%. What was the expected inflation rate last year?(Points : 4)

5% 2% 10% 8%