12. The primary case against keeping an independent Fed is? A. Prevent the development of an independent business cycle B. Lessen the Role of academic economists in running the country C. Allow the integration of monetary and Fiscal policy D. Introduce people with political now how into the decision making process

12. The primary case against keeping an independent Fed is? A. Prevent the development of an independent business cycle B. Lessen the Role of academic economists in running the country C. Allow the integration of monetary and Fiscal policy D. Introduce people with political now how into the decision making process

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The Fed’s bond holdings increased from $900 billion in 2009 to $4.5 Trillion in 2016. The purpose of the Fed’s decision to increase its bond holdings from 2009 to 2016 was to A. to decrease the reserves in the banking system thus engaging in so called “contractionary monetary policy” needed to contract the level of inflation B. contract the money supply to counteract the high rates of unemployment then existing in the United States C. increase the reserves in the banking system to increase bank lending and aggregate demand. D. engage in expansionary fiscal policy
The Fed increases money supply during routine open market operations by Select one: a. Issuing new govt bonds b. Selling new govt bonds c. Buying existing govt bonds d. Selling existing govt bonds e. Buying your shoes
1. Which do you think would be more harmful to the economy—an inflation rate that averages 5 percent a year that has a high standard deviation or an inflation rate of 7 percent that has a standard deviation close to zero? 2. Suppose a major bank needs to borrow $20 billion overnight that it cannot obtain from private creditors. The Fed is willing to make a discount loan of $20 billion provided that it will not alter the aggregate supply of reserves to the banking system. How can it do so?
12.
1a.Name 2 or more tools that the Fed uses in conducting monetary policy. b.Describe how / why the Fed might use one of these tools.
With respect to controlling the money supply,the law requires the Fed to take orders froma. the president.b. the Speaker of the House.c. the Secretary of the Treasury.d. no one—the Fed is an independent agency.
Which of the following policy tool of the Federal Reserve was adopted in connection with the "Great Recession" of 2007-2008? A. Reserve requirements. B. Interest on Reserves C. Open market operations. D. Discount policy.
Which of the following statements is TRUE? a. The Fed decreased money supply to accommodate the first oil shock in 1973-74 b. The Fed did nothing to accommodate the first oil shock in 1973-1974 c.Japan’s Central Bank increased the money supply to accommodate the first oil shock in 1973-74 d.Japan’s Central Bank did nothing to accommodate the first oil shock in 1973-1974
1. What is Central Bank Independence(CBI)? What is the difference between political and operational independence? 2. Why do you expect the relationship between CBI and inflation to differ between the federal reserve and the central banks for the CFA?
Which of the following actions by the Fed would cause interest rates to fall? A. Raising the discount rate B. Purchasing bonds from commercial bank C. Raising the reserve requirement D. None of the above
25. Suppose the Fed conducts an open market sale. We can expect this transaction to A) reduce the money supply, increase bond prices, and lower interest rates. B) increase the money supply, lower bond prices, and lower interest rates. C) increase the money supply, raise bond prices, and lower interest rates. D) reduce the money supply, reduce bond prices, and increase interest rates. 26. If the economy experiences an inflationary gap, a contractionary monetary policy will A) increase real GDP and increase the price level. B) increase real GDP and decrease the price level. C) decrease real GDP and increase the price level. D) decrease real GDP and decrease the price level. 27. Suppose the economy experiences a recessionary gap. Expansionary monetary policy will A) increase interest rates and increase the bond prices. B) increase interest rates and decrease…
11. Which policy tool involves the federal reserve setting a short-term interest rate to lend directly to financial institutions? a. The fed funds rate b. The discount rate c. The interest rate paid on excess reserves d. The rate of required reserves 12. Suppose the federal reserve announces a policy of purchasing short-term bonds from the financial system. This policy is an example of a. Expansionary monetary policy through open market operations designed to decrease the federal funds rate b. Contractionary monetary policy through open market operations designed to increase the federal funds rate