Exam 13: Monetary Policy: Conventional and Unconventional

If the price level rises,what will happen to the demand for reserves?

The main reason the United States established a central bank was

If interest rates increase,what is most likely to happen to the total expenditure schedule?

When the Federal Reserve System was first established,its founders intended the Fed to

Which of the following is most sensitive to monetary policy?

When interest rates increase,banks will normally

The Fed's principal objective is to

The Fed relies on open market operations,which work

The Fed's purchase and sale of government securities is known as

An increase in the money supply should cause the expenditure schedule to shift upward.

Explain the concept of 'lender of last resort'.What is discount rate?

Figure 13-1 -In Figure 13-1,which panel shows the effect of a recession on the interest rate?

Proponents of Fed independence maintain that

The principal objective of the Federal Reserve System is to

The reserve demand schedule is drawn on a graph that has the quantity of reserves on the horizontal axis and

If the Fed's open market operations expand the money supply,one can expect

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

Bank lending and deposits tend to change as interest rates change.Can the Fed counteract this tendency?

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

Discount rate policy is most often