Exam 13: Monetary Policy Conventional and Unconventional

When the Fed wishes to decrease the money supply it can

In the Keynesian causal chain,changes in GDP cause changes in the level of interest rates.

The Fed carries out monetary policy chiefly by influencing the demand for reserves schedule.

In Table 13-1,if the required reserve ratio is 10 percent,what will happen to the money supply? Use the oversimplified money multiplier in your calculations.

The demand for reserves will increase at lower levels of GDP.

Reserves demanded varies

To decrease the money supply,the Fed purchases government securities,which decreases government spending.

The Federal Reserve System functions as America's

The Fed is institutionally independent.A major advantage of this is that monetary policy

Unconventional monetary policies include massive lending to banks and open-market purchases of assets other than Treasury bills.

The Fed is institutionally independent.A major disadvantage of this is that monetary policy

The discount rate is the rate that the

The money supply contracts when the Fed

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

The opportunity cost of holding excess reserves will be lower at an 8 percent federal funds rate in comparison to a 10 percent federal funds rate.

In 1998,Japan decided to make the Bank of Japan,its central bank,

Income is to money as

If the Fed buys $5 million in government bonds,how much will the money supply change?

Which of the following phrases indicates that income is being spoken of?

When the Fed buys a Treasury bill from the public,how does it usually pay for the T-bill?