Exam 29: Monetary Policy: Conventional and Unconventional

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

When bond prices fall, interest rates rise.

There is a positive relationship between the quantity of reserves supplied and the federal funds rate.

Which of the following would indicate that the dollar amount being analyzed is money?

In Latin America, countries like Brazil and Mexico have found it necessary to grant their central banks more independence in order to

The central bank of the United States is known as the

Assume the required reserve ratio is 20 percent and the FOMC orders an open-market purchase of $100 million in government securities from member banks. If the oversimplified money multiplier is assumed, then the money supply will

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

As the federal funds rate rises, the banks' opportunity cost of holding excess reserves falls.

The main purpose of expansionary monetary policy is to reduce interest rates.

The tool most frequently relied on by the Fed is

Which of the following is an unconventional monetary policy?

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

The concept of "lender of last resort" is that when

Reserves demanded varies

An increase in the reserve requirement

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

Describe the origins of the Fed and the arguments about the independence of the Fed.

The Fed cannot predict the effects of open-market operations with perfect accuracy because of

The monetary policies carried out by the Fed