Chapter 14 PQ-A

Chapter 14 PQ-A - Exam Name_ MULTIPLE CHOICE. Choose the...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question 1) The top policy goal for Paul Volker when he became chair of the Federal Reserve's Board of Governors in 1979 was A) high employment. B) economic growth. C) stability of the financial markets. D) a low current account deficit. E) price stability. 1) 2) When the Fed increased the volume of discount loans after the terrorist attacks of September 11, 2001, it was trying to achieve A) price stability. B) a low current account deficit. C) economic growth. D) stability of the financial markets. E) high employment. 2) Figure 14 - 1 3) Refer to Figure 14 - 1. In the figure above, the money demand curve would move from MD 1 to MD 2 if A) the interest rate increased. B) the price level decreased. C) the Federal Reserve bought Treasury securities. D) real GDP increased. 3) 4) Using the money demand and money supply model, an open market purchase of Treasury securities by the Federal Reserve would cause the interest rate to A) not change. B) decrease. C) increase. D) increase if the economy is in a recession. 4) 1
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5) Suppose that households became mistrustful of the banking system and decide to decrease their checking accounts and increase their holdings of currency. Using the money demand and money supply model and assuming all else is held constant, the interest rate should A) increase, then decrease. B) not change.
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This note was uploaded on 05/02/2009 for the course ECON 2010 taught by Professor Roussel during the Spring '08 term at LSU.

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Chapter 14 PQ-A - Exam Name_ MULTIPLE CHOICE. Choose the...

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