QUESTION 35 The Federal Reserve has the ability to set all interest rates in the
ID: 2656120 • Letter: Q
Question
QUESTION 35
The Federal Reserve has the ability to set all interest rates in the economy including mortgage rates and credit card rates.
True
False
1.96078 points
QUESTION 36
The monetary base is defined as the sum of currency in circulation and reserve balances (deposits held by banks and other depository institutions in their accounts at the Federal Reserve).
True
False
1.96078 points
QUESTION 37
Milton Friedman argued that the money supply provides important information about the near-term course for the economy and determines the level of prices and inflation in the long run.
True
False
1.96078 points
QUESTION 38
The FOMC is intentionally vague about its course for monetary policy. This is done to limit speculation in the stock and bond markets.
True
False
1.96078 points
QUESTION 39
Following its meeting in January 2012, the FOMC issued a statement regarding its longer-run goals and monetary policy strategy. The FOMC noted in its statement that the Committee judges that inflation at the rate of 0% percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve's statutory mandate.
True
False
1.96078 points
QUESTION 40
The FOMC communicates its inflation rate goals to help keep longer-term inflation expectations firmly anchored. This fosters price stability and moderate long-term interest rates and enhances the FOMC's ability to promote maximum employment.
True
False
Explanation / Answer
QUESTION 35 The Federal Reserve has the ability to set all interest rates in the economy including mortgage rates and credit card rates. FALSE The Fed actually controls only two rates the Federal Funds Rate and the Discount Rate. It dosn't have any conytrol on prime rates. QUESTION 36 The monetary base is defined as the sum of currency in circulation and reserve balances (deposits held by banks and other depository institutions in their accounts at the Federal Reserve). TRUE QUESTION 37 Milton Friedman argued that the money supply provides important information about the near-term course for the economy and determines the level of prices and inflation in the long run. TRUE QUESTION 38 The FOMC is intentionally vague about its course for monetary policy. This is done to limit speculation in the stock and bond markets. FALSE The FOMC is the principal organ of United States national monetary policy to overseeing the nation's open market operations .