Exam 15: Monetary Policy

In the following table,fill in the columns for your return on investment if the price of your house increased or decreased by 40 percent,based on the down payments specified in the first column. Return on Your Investment From

The Fed can use contractionary monetary policy in an attempt to keep inflation from increasing.

The dynamic aggregate demand and aggregate supply model accounts for the price level rising every year.

The Taylor rule links the Federal Reserve's target for the

Present two arguments as to why the Fed should adopt inflation targeting as a framework for monetary policy.

Which of the following statements about inflation targeting is true?

A monetary growth rule means that

Use a graph to show the effects of an expansionary monetary policy moving an economy out of recession and to potential real GDP.Explain what happens to aggregate demand,real GDP,and the price level.

If the Fed buys Treasury bills,this will shift the

Expansionary monetary policy refers to the ________ to increase real GDP.

Table 15-3 -Refer to Table 15-3.Consider the hypothetical information in the table above for potential real GDP,real GDP,and the price level in 2018 and in 2019 if the Federal Reserve does not use monetary policy.If the Fed wants to keep real GDP at its potential level in 2019,it should

Figure 15-11 -Refer to Figure 15-11.In the dynamic model of AD-AS in the figure above,the economy is at point A in year 1 and is expected to go to point B in year 2,and the Federal Reserve pursues policy.This will result in

In June 2017,the Federal Open Market Committee raised the target for the federal funds rate to a range of 1.00 to 1.25 percent.To keep the federal funds rate in this target band,the Fed set the interest rate it pays on reverse repurchase agreements to

If the Fed lowers its target for the federal funds rate,this indicates that

Using the Taylor rule,if the current inflation rate equals the target inflation rate and real GDP equals potential GDP,then the federal funds target rate equals the

Suppose that the Federal Reserve Open Market Committee adheres to the ideas expressed by ________.If the economy moves into a recession,the Fed would recommend that the federal funds target rate decrease as long as the inflation rate did not rise above the publicly announced goal for inflation.

When the Federal Reserve increases the money supply,people spend more because they now have more money.

The economy suffered a mild recession in 2001.Despite the recession,home sales and durable goods sales remained high.Which of the following is a plausible explanation?

In 2017,some banks in Europe had to make interest payments to borrowers rather than receive interest payments from borrowers.Which of the following statements describes this situation?

If the probability of losing your job remains ________,a recession would be a good time to purchase a home because the Fed usually ________ interest rates during this time.