_ l 1. Identify the correct statement horn the following. a. The interest rate charged by the Fed on the short-term loans to nancial institutions is called the discount rate. b. Banks need to demonstrate that they have exhausted all other options before coming to the discount window, as per the Fed's revised policies on discount window lending. c. Primary credit rates are set ISO basis points above the federal funds target rate and are available to banks not eligible for primary credit. (:1. Secondary credit rates are set 100 basis points (I percent) above the federal funds rate and are available only to very sound, nancially strong banks. e. These loans are typically made overnight, and they cannot be extended for longer periods. 12. Financial institutions make prot by: a. lending each other money at high rates of interest. b. borrowing at a low rate and lending at a high rate. c. borrowing money from the govemment and lending to the public. d. lending at a low rate and borrowing at a high rate. e. borrowing money from the public and lending only to businesses at a high rate of interest. 13. An economy is at full employment output when a. when unemployment is zero b. when cyclical unemployment is positive 0. when cyclical unemployment is negative d. when frictional unemployment is zero 8. the unemployment rate is at the natural rate 14. The demand for money: a. consists entirely of transactions demand. b. is independent of changes in the interest rate. c. is independent of changes in the ination rate. d. is also called the demand for liquidity. e. is positively related to interest rates. 15. Which of the following is an endogenous variable in the money market and an exogenous variable in the Forex market? a. The exchange rate b. The money supply 0. The demand for domestic currency d. The interest rate e. The ination rate