Please answer all. Thanks a bunch! Question 2 The process overseeing the Federal

ID: 1126160 • Letter: P

Question

Please answer all. Thanks a bunch!

Question 2

The process overseeing the Federal Reserve's open market operations starts with:

The Federal Open Market Committee meeting every six weeks to discuss and vote on monetary policy, issuing a directive to the Board of Governors, which then buys and sells bonds at the bequest of the Federal Open Market Committee.

The Board of Governors meeting every six weeks to discuss and vote on monetary policy, issuing a directive to the NY Fed's open market trading desk, which then buys and sells bonds at the bequest of the Board of Governors.

The Federal Open Market Committee meeting every six weeks to discuss and vote on monetary policy, issuing a directive to the U.S. Treasury, which then buys and sells bonds at the bequest of the Federal Open Market Committee.

None of these answers are correct.

The Board of Governors meeting every six weeks to discuss and vote on monetary policy, issuing a directive to the Federal Open Market Committee, which then buys and sells bonds at the bequest of the Board of Governors.

Question 3

The Federal Reserve can change the discount rate to contract the money and credit supply by:

Raising the discount rate to lower banking profits and discourage the expansion of the banking industry.

Lowering the discount rate to encourage banks to hold more reserves idle and make less loans.

Raising the discount rate to discourage banks from seeking additional deposits.

Raising the discount rate to discourage banks from borrowing reserves from their regional Federal Reserve bank and making loans.

Lowering the discount rate to encourage banks to seek more deposits and make less loans.

Question 4

Open market operations are used by the Federal Reserve to both stimulate and slow economic growth by:

Purchasing government bonds to stimulate economic activity by contracting the money and credit supply and lowering interest rates; and selling government bonds to slow economic activity by expanding the money and credit supply and raising interest rates.

Selling government bonds to stimulate economic activity by contracting the money and credit supply and raising interest rates; and purchasing government bonds to slow economic activity by contracting the money and credit supply and raising interest rates.

Selling government bonds to stimulate economic activity by expanding the money and credit supply and lowering interest rates; and purchasing government bonds to slow economic activity by contracting the money and credit supply and raising interest rates.

Selling government bonds to stimulate economic activity by contracting the money and credit supply and lowering interest rates; and purchasing government bonds to slow economic activity by expanding the money and credit supply and raising interest rates.

Purchasing government bonds to stimulate economic activity by expanding the money and credit supply and lowering interest rates; and selling government bonds to slow economic activity by contracting the money and credit supply and raising interest rates.

Question 5

To stimulate the economy in a deep recession in which output and employment fall and price inflation is below target, the Federal Reserve is likely to initiate the following sequence of events:

The Federal Reserve purchases bonds, reduces interest rates, and stimulates the growth in aggregate demand, that produces a rise in output, employment, and price inflation.

The Federal Reserve sells bonds, reduces interest rates, and stimulates the growth in aggregate supply, that produces a rise in output, employment, and price inflation.

The Federal Reserve purchases bonds, reduces interest rates, and stimulates the growth in aggregate supply, that produces a rise in output, employment, and a decline in price inflation.

The Federal Reserve sells bonds, reduces interest rates, and stimulates the growth in aggregate demand, that produces a rise in output, employment, and price inflation.

The Federal Reserve purchases bonds, reduces interest rates, and stimulates the growth in aggregate demand, that produces a rise in output, employment, and a decline in price inflation.

Question 6

The Federal Reserve can change reserve requirements to expand the money and credit supply by:

Lowering reserve requirements to permit banks to make more high-risk loans.

Raising reserve requirements to provide additional funds available to banks to make loans.

Lowering reserve requirements to provide additional funds for banks to make loans.

Lowering reserve requirements to allow banks to create more deposits.

Raising reserve requirements to force households and businesses to hold more currency.

The Keynesian view of the appropriate operating procedures and goals of monetary policy is that:

The Federal Reserve should target the growth of a monetary aggregate with the primary goal being full employment and high growth, and a secondary goal of price stability.

The Federal Reserve should target both the growth of a monetary aggregate and the level of interest rates with the primary goal being full employment and high economic growth, and a secondary goal of price stability.

The Federal Reserve should target the level of interest rates with the primary goal being full employment and high economic growth, and a secondary goal of price stability.

The Federal Reserve should target the growth of a monetary aggregate with the primary goal being price stability, and a secondary goal of full employment and high economic growth.

The Federal Reserve should target the level of interest rates the primary goal being price stability, and a secondary goal of full employment and high economic growth.

Question 8

In the Federal Funds Market shown in the diagram above, which statement concerning this diagram is likely to be TRUE?

The Board of Governors has just purchased bonds on the open market, increasing the deposits and loans of the banking system, pushing short-term interest rates down.

The NY open market trading desk has just sold bonds on the open market, increasing the loans of the banking system, pushing medium-term interest rates down.

The NY open market trading desk has just purchased bonds on the open market, increasing the loans of the banking system, pushing long-term interest rates down.

The NY open market trading desk has just sold bonds on the open market, increasing the reserves of the banking system, pushing short-term interest rates down.

The NY open market trading desk has just purchased bonds on the open market, increasing the reserves of the banking system, pushing short-term interest rates down.

Question 9

Generally speaking, the operating procedures and goals of the Federal Reserve since the 1980s until 2008 has been to:

Conduct monetary policy by targeting the growth of a monetary aggregate with the primary goal of achieving full employment.

Conduct monetary policy by targeting interest rates with the primary goal of achieving full employment.

None of the answers are correct.

Conduct monetary policy by targeting interest rates with the primary goal of achieving price stability.

Conduct monetary policy by targeting the growth of a monetary aggregate with the primary goal of achieving price stability.

Question 10

The Federal Reserve is said to be an independent entity within the Federal government because:

Its powers are limited to giving advice to the Treasury.

It can make policy decisions without consulting either the President or Congress.

Its powers are nearly as great as the President.

It is funded by monies that come from the business and banking community.

Its powers are specified in the constitution.