quiz 13ma - c. Reduce their loans d. Reduce their deposits...

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Quiz 13 (30). 1. Federal Reserve System: a. Has 3 tools of monetary control: open-market operations, reserve requirements and bank lending policies b. Is controlled by an elected Board of Governors c. Sets the interest rate on 30-year Treasury bonds d. Is less independent of political influence than the Bank of England 2. If the Fed wishes to lower interest rates, it may a. Sell government securities b. Raise banks’ required reserve ratios c. Lower the discount rate d. Discourage member banks from borrowing at the Fed 3. An increase in bond prices a. Implies an increase in interest rates b. Implies a reduction in interest rate c. Is likely to lead to a reduction of stock prices d. Is likely to lead to a reduction in investment 4. As interest rate rises, banks are likely to: a. Reduce their required reserves b. Reduce their excess reserves
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Unformatted text preview: c. Reduce their loans d. Reduce their deposits 5. The quantity of money demanded: a. Falls as inflation rises b. Falls as consumption rises c. Rises as interest rates rise d. Rises as GDP rises 6. Monetary policy will have a stronger effect on the real value of GDP a. The more sensitive the demand for money is to interest rates b. The more sensitive investment is to interest rates c. The higher the income taxes rate d. The steeper the aggregate supply curve 7. The aggregate demand curve has a negative slope because, among other reasons: a. A price rise increases the demand for money and raises interest rates b. A price rise increases the real supply of money c. A price rise increases real consumer expenditures d. A price rise raises the real value of money wealth...
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This note was uploaded on 09/09/2008 for the course ECON 202 taught by Professor Fernandez during the Fall '08 term at University of Louisville.

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quiz 13ma - c. Reduce their loans d. Reduce their deposits...

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