Exam 13: Monetary Policy Conventional and Unconventional

The Federal Reserve Open Market Committee includes the seven members of the Board of Governors,presidents of five of the twelve district banks,and the Secretary of the Treasury.

Members of the Board of Governors of the Federal Reserve System are

Assume the required reserve ratio is 10 percent and the FOMC orders an open market sale of $50 million in government securities from member banks.If the oversimplified money multiplier is assumed,then the money supply will

In practice,money supply and short-term interest rates are determined by the

Which of the following will lower interest rates in the short run?

When the Fed purchases government securities from a commercial bank,the bank

The Fed can drive up interest rates by selling government securities and decreasing the money supply.

The main reason the United States established a central bank was

The actual control of the Federal Reserve System resides in the

If the Fed raises the discount rate,what will be the effect on the money supply?

If the Fed reduces the required reserve ratio,

The Federal Open Market Committee consists of

As interest rates rise,banks seek to decrease their loans and,thereby,shrink the money supply.

Part of the reason that people confuse money and income is because

If the Fed lends to member banks,what happens to reserves and the money supply?

If the Fed buys more bonds from the public,and increases the price it is willing to pay for the bonds,what will happen to interest rates?

Does the Fed have good control over the money supply?

The main purpose of expansionary monetary policy is to

When interest rates decrease,banks will normally

The Federal Reserve System was established