Answer the following statements true (T) or false (F)
1) An expansionary monetary policy is one that reduces the supply of money.
2) Changes in the interest rate are more likely to affect investment spending than consumer
spending.
3) The job of the Fed in limiting the supply of money may be made more complex if commercial
banks initially have substantial excess reserves.
4) When QE2 and Operation Twist were implemented, the Fed suspended its policy of forward
commitment.
1) F
2) T
3) T
4) F
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