Answer the following questions true (T) or false (F)
1. An argument in favor of the Federal Reserve adopting inflation targeting is that in the long run, the Fed can have an impact on inflation but not on real GDP.
2. A borrower defaults on a loan when he stops making payments on the loan.
3. The Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association were established by Congress in order to regulate banks that buy and sell mortgage-backed securities.
1. TRUE
2. TRUE
3. FALSE
You might also like to view...
Bond coupon payments represent
A) dividends paid to owners. B) interest on the amount borrowed. C) capital gains for tax purposes. D) payments to preferred shareholders.
In its day-to-day operations, the Fed focuses on
a. an unemployment rate target b. an inflation rate target c. an interest rate target d. a money demand curve target e. several economic targets together
The imposition of price ceilings on a market often results in
a. an increase in investment in the industry. b. a persistent surplus in the market. c. an increase in expenditures in the black-market. d. lower prices being offered on the black market.
Which statement is true?
A. M1 is money, but not M2. B. M2 is money, but not M1. C. Both M1 and M2 are money. D. Neither M1 nor M2 is money.