Question 1

Which of the following is not a disadvantage of of the Fed's "just do it" approach to monetary policy?

Accepted Answer

A) There is low transparency of policy. 
B) There is low accountability for central bankers. 
C) This type of policy relies on the policy-makers in charge. 
D) It relies on a stable money-inflation relationship. 
A) There is low transparency of policy. 
B) There is low accountability for central bankers. 
C) This type of policy relies on the policy-makers in charge. 
D) It relies on a stable money-inflation relationship.

Question 2

The fluctuations in both money supply growth and the federal funds rate during 1979-1982 suggest that the Fed

Accepted Answer

A) had shifted to borrowed reserves as an operating target. 
B) had shifted to total reserves as an operating target. 
C) had shifted to the monetary base as an operating target. 
D) never intended to target monetary aggregates. 
A) had shifted to borrowed reserves as an operating target. 
B) had shifted to total reserves as an operating target. 
C) had shifted to the monetary base as an operating target. 
D) never intended to target monetary aggregates.

Question 3

The primary goal of the European Central Bank is

Accepted Answer

A) price stability. 
B) exchange rate stability. 
C) interest rate stability. 
D) high employment. 
A) price stability. 
B) exchange rate stability. 
C) interest rate stability. 
D) high employment.

Question 4

Using Taylor's rule,when the equilibrium real federal funds rate is 3 percent,the positive output gap is 2 percent,the target inflation rate is 1 percent,and the actual inflation rate is 2 percent,the nominal federal funds rate target should be

Accepted Answer

A) 5 percent. 
B) 5.5 percent. 
C) 6 percent. 
D) 6.5 percent. 
A) 5 percent. 
B) 5.5 percent. 
C) 6 percent. 
D) 6.5 percent.

Question 5

The rate of inflation increases when

Accepted Answer

A) the unemployment rate equals the NAIRU. 
B) the unemployment rate exceeds the NAIRU. 
C) the unemployment rate is less than the NAIRU. 
D) the unemployment rate increases faster than the NAIRU increases. 
A) the unemployment rate equals the NAIRU. 
B) the unemployment rate exceeds the NAIRU. 
C) the unemployment rate is less than the NAIRU. 
D) the unemployment rate increases faster than the NAIRU increases.

Which of the following is not a disadvantage of of the Fed's "just do it" approach to monetary policy?

The fluctuations in both money supply growth and the federal funds rate during 1979-1982 suggest that the Fed

The primary goal of the European Central Bank is

Using Taylor's rule,when the equilibrium real federal funds rate is 3 percent,the positive output gap is 2 percent,the target inflation rate is 1 percent,and the actual inflation rate is 2 percent,the nominal federal funds rate target should be

The rate of inflation increases when

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

What Is Money

Understanding Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Foreign Exchange Market

The International Financial System

Quantity Theory,inflation and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

The ISLM Model

Filters

Exam 16: The Conduct of Monetary Policy: Strategy and Tactics

Which of the following is not a disadvantage of of the Fed's "just do it" approach to monetary policy?

The fluctuations in both money supply growth and the federal funds rate during 1979-1982 suggest that the Fed

The primary goal of the European Central Bank is

Using Taylor's rule,when the equilibrium real federal funds rate is 3 percent,the positive output gap is 2 percent,the target inflation rate is 1 percent,and the actual inflation rate is 2 percent,the nominal federal funds rate target should be

The rate of inflation increases when

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

What Is Money

Understanding Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Foreign Exchange Market

The International Financial System

Quantity Theory,inflation and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

The ISLM Model

Filters