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Macroeconomics Quiz CH 10 & 11 partII

Macroeconomics Quiz CH 10 & 11 partII - Chapters 10...

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Chapters 10 & 11 PartII 1. If inflation is a threat, then the Fed will conduct monetary policy aimed at _______ the interest rate which then will shift aggregate demand to the _______. A) increasing; right B) decreasing; right C) increasing; left D) decreasing;left Points Earned: 10.0/10.0 Correct Answer(s): C 2. If the Fed sells government bonds, bank reserves will _______, leading to a(n) _______ in the money supply. Correct Answer(s): D 3. The Fed increases the money supply by selling bonds. A) True B) False Correct Answer(s): False
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4. Open market transactions involve which of the following activities? issuing new Federal Reserve notes buying or selling newly issued government bonds to raise funds for the government buying or selling previously issued government bonds to change the volume of bank reserves Points Earned: 10.0/10.0 Correct Answer(s): C
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