Changes in the growth rates for money supply and money velocity affect the growth rate in:

Select one:

a. real economic activity

b. the rate of inflation

c. the turnover of goods and services

d. both a and b

Question 7

Currently, the backing for Federal Reserves notes is primarily in the form of:

Select one:

a. gold certificates

b. gold bullion

c. eligible paper (business notes and drafts)

d. none of the above

Question 8

Deposits that add new reserves to the bank where they are deposited are called:

Select one:

a. primary deposits

b. derivative deposits

c. secondary deposits

d. Special Drawing Rights

Question 9

During the 2007 - 2009 financial crisis, ___________ and __________, who were major participants in the secondary mortgage markets, were on the verge of financial insolvency and possible collapse in mid-2008.

Select one:

a. Fannie Mae and Freddie Mac

b. the Federal Treasury and the Federal Reserve

c. Morgan Stanley and Smith Barney

d. Washington Mutual and Lehman Brothers

e. none of the above

Question 10

Federal Reserve open market operations, setting reserve requirement, and lending to depositories are:

Select one:

a. usually conducted simultaneously

b. designed to improve the federal deficit

c. of equal importance in their effort

d. functions shared with the U.S. Treasury

e. none of the above