Exam 30: Monetary Policy: Conventional and Unconventional

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

One of the principal ways in which Congress intended the Fed to provide insurance against financial panics was to act as a "lender of first resort."

Which of the following will cause movement along the reserve demand schedule?

In reality, commercial banks function most like ____ of the district Federal Reserve Banks.

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

The Federal Reserve System can be described as a bank for bankers.

As a knowledgeable investor in 2007, you should have realized that as interest rates fell, bond prices would

When the Fed wishes to decrease the money supply it can

The Fed is unlike other central banks in that it

Individual banks always respond quickly and significantly to changes in the discount rate.

Critics of Fed independence argue that

Personal consumption spending is the most sensitive component of aggregate demand to monetary policy.

If the FOMC orders the sale of T-bills in the open market, then bank reserves are

If the Federal Open Market Committee decides to expand the money supply, then it will

The Fed has control over bank reserves and complete control over the money supply.

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

An increase in the interest rate is associated with an increase in bond prices.

Which of the following is an income number?

In its original role as "lender of last resort" the Fed was supposed to

If the Fed buys a T-bill from an individual rather than from a bank, the effect on the money supply is