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Please answer all questions or don't answer at all. 1. Which of the following best describes the relationship between the Fed and the Administration? A)

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1. Which of the following best describes the relationship between the Fed and the Administration? A) The Fed must receive approval by the Administration before conducting monetary policy. B) The Fed must implement a monetary policy specifically to the support the Administration's policy. C) The Administration must receive approval from the Fed before implementing fiscal policy. D) None of these statements describe the relationship between the Fed and the Administration. 2. Financial institutions such as commercial banks, bond mutual funds, insurance companies, and pension funds 6 . Which of the following is not an activity of Fed district banks? A) clearing checks B) replacing old currency C) providing loans to depository institutions D) acting as an intermediary to match up lenders and borrowers in the commercial paper market 3. If the federal government is willing to pay whatever is necessary to borrow loanable funds, but the private sector is not, this reflects: A) the crowding-out effect. B) dynamic open market operations. C) defensive open market operations. D) monetizing the debt. 4. According to the theory of rational expectations, inflationary expectations encourage businesses and households to their demand for loanable funds in order to borrow and make planned expenditures increase. A) higher; reduce B) higher; increase C) lower; reduce D) lower; increase 5. When the Fed attempts to counter rising rates (caused by an increase in the budget deficit) by loosening the money supply, this is known as: A) monetizing the debt. B) the crowding-out effect. C) both monetizing the debt and the crowding-out effect. D) neither of these

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