Chapter 17

Chapter 17 - Chapter 17 Exerciseh . Key terms 1. Open...

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Chapter 17 Exerciseh . Key terms 1. Open Market Operations 2. Discount Window 3. Lender Of Last Resort 4. Matched Sale-Purchase Transaction 5. Repurchase Agreement . Multiple Choice 1. The Fed uses three policy tools to manipulate the money supply: _____, which affect reserves and the monetary base; changes in _____, which affect reserves and the monetary base by influencing the quantity of discount loans; and changes in _____, which affect the money multiplier. a. open market operations; discount lending; margin requirements b. open market operations; discount lending; reserve requirements c. discount lending; open market operations; margin requirements d. discount lending; open market operations; reserve requirements 2. The Fed uses three policy tools to manipulate the money supply: open market operations, which affect the _____; changes in discount lending, which affect the _____ by influencing the quantity of discount loans; and changes in reserve requirements, which affect the _____. a. money multiplier; monetary base; monetary base b. monetary base; money multiplier; monetary base c. monetary base; monetary base; money multiplier d. money multiplier; money multiplier; monetary base 3. The interest rate charged on overnight loans of reserves between banks is the a. prime rate. b. discount rate. c. federal funds rate. d. Treasury bill rate. e. rediscount rate. 4. The federal funds rate is the a. interest rate on overnight loans of reserves between banks. b. interest rate on government debt. c. interest rate the government pays when borrowing from banks. d. all of the above. e. both (a) and (c) of the above. 5. The primary indicator of the Fed’s stance on monetary policy is a. the discount rate. b. the federal funds rate. c. the growth rate of the monetary base. d. the growth rate of M2. e. the Treasury bill rate. 6. In Figure 17-1, a decrease in the discount rate a. shifts the horizontal section of reserves supply from to reducing the equilibrium federal funds rate from to
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b. shifts the horizontal section of reserves supply from to increasing the equilibrium federal funds rate from to c. shifts the horizontal section of reserves supply from to increasing the equilibrium federal funds rate from to d. shifts the horizontal section of reserves supply from to reducing the equilibrium federal funds rate from to 7. In Figure 17-1, the vertical section of the supply of reserves lengthened by
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This note was uploaded on 01/10/2011 for the course FSD 201 taught by Professor Huong during the Spring '10 term at Beacon FL.

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Chapter 17 - Chapter 17 Exerciseh . Key terms 1. Open...

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