Earned 1010 correct answers true 45 following the

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Points Earned: 1.0/1.0 Correct Answer(s):True
45. Following the 2001 recession (aka, the job-loss recovery), the Federal Reserve lowered their target for the federal funds rate all the way down to 1%.
Table for Individual Question Feedback Points Earned: 1.0/1.0
46. Following the job-loss recovery, the FOMC raised the target for the federal funds rate 17 meetings in a row.
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47. Since December 2007, the federal funds rate has been at the zero bound with the official target being a range from zero to 0.25%.
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48.
During the lead up to Y2K, reserve demand was decreasing since banks were afraid to make loans. A) True B) False Correct Answer(s):False
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49. During the lead up to Y2K, the Fed, to keep the federal funds rate from rising, had to conduct open market purchases. This action is referred to as 'accommodating' the shock to reserve demand.
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50. During normal times, before the zero bound, the Fed forecasts reserve demand and supplies the necessary reserves to meet their federal funds target. The better the forecast, the closer the actual federal funds rate is to the target federal funds rate.
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51. In order to raise the federal funds rate the Fed would conduct open market sales.
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52.
When discussing money demand, we argued that people tend to hold more money as the interest rate rises, all else constant. A) True B) False Correct Answer(s):False
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53. If the Fed conducts open market sales then the price of bonds should fall.
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54. According to our money demand / money supply analysis, an increase in GDP = Y, all else constant, will result in a rise in nominal interest rates.
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55. According to the percent change form of the quantity theory of money, if velocity falls by 10%, then the Fed, in order to achieve their dual mandate, should let the nominal money supply grow by 15%.
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56.
A portfolio shock such that households want to hold less money, at any given interest rate, will result in the velocity of money falling. A) True B) False Correct Answer(s):False
Table for Individual Question Feedback Points Earned: 1.0/1.0
57. Milton Friedman felt that high inflation was always caused by excessive money growth. In fact, he has been quoted as "Inflation is always and everywhere a monetary phenomenon."
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