Consider the figure to the right. Have the right to the Fed accomplish a​ $900 billion money supply​ (MS) and also a​ 5% interest rate​ (point C)?A.Yes. The Fed have the right to target the money supply or the attention rate.B.No. The Fed go not control the money supply.C.No. The Fed cannot target both the money supply and also the interest rate simultaneously.D.Yes. Controlling the money supply sets the attention rate.

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Suppose the economy is in equilibrium in the first period at suggest A. In the second​ period, the economy reaches allude B. What plan would the Fed likely pursue in order to move ad 2 to ad Subscript 2 comma policy and reach equilibrium​ (point C) in the second​ period? ​ (What policy will increase the price level and also increase yes, really real​ GDP?)A.Open industry purchase of federal government securitiesB.Increase the make reservation requirementC.Decrease taxesD.Increase the discount rate
The Fed buys and also sells bondsbuys and sells bonds together a part of its plan to reach every one of the following objectives​ except:A.Stability of gaue won markets and also institutions.B.Price stability.C.High unemployment.D.Economic growth.
The figure to the best illustrates the economic situation using the Dynamic accumulation Demand and aggregate Supply ModelIf actual real GDP in 2006 occurs at suggest B and potential GDP occurs at LRAS 06 us would intend the federal Reserve bank to pursue________________ monetary policy.Actual genuine GDP-----Potential real GDP-----Price level-----Unemployment-----
a contractionaryActual - decreasespotential - does not changeprice level- decreasesunemployment - increases
In the figure to the​ right, as soon as the money supply boosted from ms 1 to ms 2​,the equilibrium interest rate dropped from​ 4% to​ 3%. Why?A.Increased demand for Treasury securities drives down their interest rate.B.​Initially, that company hold much more money 보다 they want family member to various other financial assets.C.Increased need for Treasury securities drives up their prices.D.All the the above.

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In the number to the​ right, the economic situation experiences inflation in the 2nd period. What would certainly be the​ Fed"s reaction if actual real GDP occurs at point B and potential GDP occurs at LRAS 2​?
As the number to the right​ indicates, the Fed can affect both the money supply and interest rates.​ However, in recent​ years, the Fed targets interest rates in financial policy much more often 보다 it walk the money supply. Which interest price does the Fed​ target?A.The​ short-term actual interest rateB.The federal funds rateC.The discount rateD.The​ irreversible nominal attention rate
The number to the right illustrates a dynamic AD-AS modelSuppose the economic situation is in equilibrium in the an initial period at suggest A. In the second​ period, the economic climate reaches allude B.We would intend the Fed to go after what form of policy in order to move advertisement 2 to advertisement Subscript 2 comma policy and reach equilibrium​ (point C) in the second​ period?-----If the federal Reserve​ Bank"s policy is​ successful, what is the effect on the adhering to macroeconomic​ indicators?Actual real​ GDP:-----Potential real​ GDP:-----Price​ level:​-----Unemployment:-----
expansionary monetary policyActual real​ GDP: increasePotential real​ GDP:does no changePrice​ level: increase​Unemployment: decrease
How carry out investment financial institutions differ native commercial​ banks? ​(Mark every that​ apply.)A.Investment banks generally perform not lend to households.B.Commercial financial institutions are financial torture to that company issuing stocks.C.Investment financial institutions take deposits.D.Investment banks do no take deposits.E.Commercial banks do no lend to households.
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