From 1979 to 1982, the Federal Reserve System:

	A.	fell into the liquidity trap.
	B.	initiated a sharply expansionary monetary policy.
	C.	pursued a policy that shifted AD to the right.
	D.	followed monetarist policy suggestions.

2.

Prior to the Great Depression, many policy makers:

	A.	believed economies always performed below their potential output level.
	B.	focused on short-run economic problems.
	C.	believed that long-run economic performance was the most important goal.
	D.	believed activist policies were important to the well-being of an economy.

3.

Seignorage refers to the:

	A.	problems created when the government prints too much money.
	B.	government's right to print money.
	C.	problems faced by Social Security as the population ages.
	D.	problems senior citizens face in retirement.

4.

Lehman Brothers was established by Henry Lehman in 1844 as a(n):

	A.	commercial bank.
	B.	saloon.
	C.	dry goods store.
	D.	investment bank.

5.

If the Fed increases the monetary base by $40 billion through open-market operations:

	A.	the U.S. government debt held by the public has been reduced by $40 billion.
	B.	the price level will increase by $40 billion.
	C.	GDP will increase by $40 billion.
	D.	government spending has increased by $40 billion.