The Fed would be pursuing a contractionary monetary policy if it was
A. lowering the reserve requirement.
B. selling dollars in foreign exchange markets.
C. selling bonds in the open market.
D. lowering the differential between the discount rate and the federal funds rate.
Answer: C
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Based on the table above, the cost of the base period market basket in 2013 is
A) $3,300. B) $4,885. C) $4,650. D) $3,885. E) None of the above answers is correct.
What happens when the Federal Reserve purchases U.S. government bonds?
A) Interest rates rise because bonds become scarcer. B) Commercial bank reserves increase. C) The national debt declines in size. D) The growth rate of the money stock falls. E) All of the above occur.
The production approach to measuring GDP requires ________
A) that the market value of a given good is a reasonable approximation of its economic value B) that all goods and services be added up before assigning a market value C) that no good or service rendered outside the market be included in GDP D) all of the above E) none of the above
A haircut (in finance) is ________
A) the payment of a block of funds as part of a refinancing arrangement B) the percentage by which the value of collateral exceeds the value of the loan C) the issue of equities rather than debt in acquiring access to money capital D) the immediate end of lending to subprime borrowers