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Quiz - Chapters 25 and 31

Quiz - Chapters 25 and 31 - Points Awarded 169.00 Points M...

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Points Awarded 169.00 Points Missed 1.00 Percentage 99.4% 1. Ben Bernanke has suggested that a core inflation rate of ________ is the equivalent of price stability. A) between 1 percent to 2 percent B) zero C) less than 5 percent. D) less than zero Points Earned: 1.0/1.0 Correct Answer(s): A 2. Usually, the Federal Reserve changes its target for the federal funds rate in units of
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3. An instrument rule is based on ________ of the economy while a targeting rule is based on ________ of the economy. Points Earned: 1.0/1.0 Correct Answer(s): A 4. The Taylor rule uses three variables to determine the target for the federal funds rate. Which of the following is NOT one of those variables?
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Points Earned: 1.0/1.0 Correct Answer(s): A 5. Suppose the inflation rate is 3 percent and the output gap is -1 percent. Assuming the equilibrium real interest rate is 2 percent, using the Taylor rule, what target should the Fed set for the federal funds rate? A) 5 percent B) 6 percent C) 4 percent D) 1 percent Points Earned: 1.0/1.0 Correct Answer(s): A 6. If the Fed buys U.S. government securities,
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Points Earned: 1.0/1.0 Correct Answer(s): A 7. In an open market purchase, the Fed ________ government securities, which ________ bank reserves. Points Earned: 1.0/1.0 Correct Answer(s): A 8. If the interest rate on Treasury bills is higher than the federal funds rate, the quantity of overnight loans supplied ________ and the ________ for Treasury bills increases.
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Points Earned: 1.0/1.0 Correct Answer(s): A
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