Chapter 34 (Final Exam)

The organization directly responsible for monetary policy in the United States is the

There is an asset demand for money because money is

An increase in the rate of interest would increase

The largest single asset in the Federal Reserve Banks' consolidated balance sheet is

The largest single liability of the Federal Reserve Banks is

Assuming that the Federal Reserve Banks sell $20 million in government securities to commercial banks and the reserve ratio is 20%, then the effect will be

Lowering the reserve ratio...

Commercial bank borrowing from the Federal Reserve

Which is the most important control used by the Federal Reserve to regulate the money supply?

The federal funds rate is the rate that

When the Federal Reserve Banks decide to buy government bonds from banks and the public, the supply of reserves in the federal funds market

When the Federal Reserve uses open-market operations to reduce the federal funds rate several times over a year, it is pursuing

The economy is experiencing high unemployment and a low rate of economic growth and the Fed decides to pursue an expansionary monetary policy. Which set of actions by the Fed would be most consistent with this policy

The economy is experiencing inflation and the Federal Reserve decides to pursue a restrictive monetary policy. Which set of actions by the Fed would be most consistent with this policy?

In the chain of cause and effect between changes in the excess reserves of commercial banks and the resulting changes in output and employment in the economy,

Which is most likely to be affected by changes in the rate of interest?

A restrictive monetary policy would be most consistent with

A shift from AD1 to AD2 would be most consistent with...

Assume that the Federal Reserve lowers interest rates to increase investment spending. The monetary policy is most likely to shift...