Answer the following statements true (T) or false (F)

1. The Federal Reserve can combat an inflationary gap in the economy by buying government
securities in the nation's capital markets.
2. An increase in aggregate demand in the normal range of the economy's aggregate supply curve
will increase the general price level in the economy.
3. The goal of macroeconomic policy is to combat inflationary and recessionary gaps which exist in
the nation's money market.
4. The Federal Reserve System is comprised of the Board of Governors in Washington, D.C. and ten district banks located throughout the country.
5. The current Chair of the Board of governors is Paul Volker. 400


1. TRUE
2. TRUE
3 FALSE
4. FALSE
5. FALSE

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