QUESTION 22

The major overall purpose of the Federal Reserve System is to

a.keep the discount rate flexible.

b.insure the deposits of persons holding funds with banking institutions.

c.regulate the money supply, and, thereby, provide a monetary climate that is in the best interest of the economy.

d.regulate the levels of excess reserves held by member banking institutions.

QUESTION 25

The demand for money is higher in Japan than in the United States because:

a.telecommunications and information technology is more advanced in the United States than in Japan.

b.Japanese consumers use credit cards more than people in the United States

c.Japanese interest rates are very high in comparison to interest rates in the United States.

d.Japanese interest rates are very low in comparison to interest rates in the United States

QUESTION 27

Given the supply of, and demand for, money in the diagrambelow, if interest rates are at "i_low", then:

Given the supply of, and demand for, money in the diagram below, if interest rates are at "i law\": then: Nominal Interest Money Supply Quantity of Money 0 a. Quantity of interest-bearing assets (such as bonds) supplied is greater than quantity demanded for bonds, 0 b. Quantity of interest-bearing assets demanded is greater than its quantity supplied. 0 c. Quantity of money demanded is less than quantity of money supplied. 0 d. Interest rates tend to decrease