Monetary Policy and Multiple Choice Points

Question 1 (5526021):
An easy money policy (low interest rates) will __________ the value of the dollar and increase exports from the United States, but will discourage foreign investment in the U.S.
Type:
Multiple Choice
Points awarded:
0.00 / 1.00
Your Answer(s):
[No answer submitted]
Correct answer(s): increase maintain decrease none of the above

Question 2 (5526037):
According to _____________ , a “monetary rule” would be very constraining for the Fed and would only increase business cycles.
Type:
Multiple Choice
Points awarded:
0.00 / 1.00
Your Answer(s):
Monetarists
Correct answer(s):
Monetarists
Keynesians
All the above
None of the above

Question 3 (5526023):
In the equation of exchange, M x V = P x Q, the V represents ___________________
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s): the average frequency with which a dollar is spent
Correct answer(s): the average amount of money in circulation the average frequency with which a dollar is spent the average price level quantity purchased

Question 4 (5525993):
The _________________ is the buying and selling of Treasury securities to influence the nation’s money supply.
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s): federal open market operations
Correct answer(s): setting of the reserve requirement setting of the discount rate federal open market operations none of the above

Question 5 (5526035):
______________ believe that there is only a small amount of crowding-out if any at all.
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
Keynesians
Correct answer(s):
Monetarists
Keynesians
All the above
None of the above

Question 6 (5526013):
One reason that monetary policy is believed to be very significant is because it is largely isolated from political pressure.
Type:
True or False
Points awarded:
1.00 / 1.00
Your Answer(s):
True
Correct answer(s):
True
False

Question 7 (5525989):
The Fed’s monetary policy tools indirectly impact the ability of financial institutions to create checkbook money through ____________.
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s): making loans
Correct answer(s): making loans printing dollar bills minting of coins mining gold

Question 8 (5526032):
In contrast to the Monetarists, the Keynesians assume that the velocity of money varies directly with _______________.
Type:
Multiple Choice
Points awarded:
0.00 / 1.00
Your Answer(s):
Money supply
Correct answer(s):
Government spending the rate of interest
Money supply the Trade deficit

Question 9 (5526003):
Raising the reserve ratio __________ the ability of banks to create money (make loans) and decreases a bank’s ability to make a profit.
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s): decreases Correct answer(s): increases decreases does not change none of the above

Question 10 (5526005):
The basic concepts for the Fed to implement an “tight money” policy would include
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
All the above
Correct answer(s):
Federal Reserve sells securities
Reserve ratio is increased
Discount rate is increased
All the above

Question 11 (5525992):
The “reserve requirement” varies according to the ______________________ and the type of deposit (checking, savings, etc.)
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s): size of the financial institution
Correct answer(s): amount of caffeine in the bloodstream size of the financial institution mood of the Fed each Monday morning none of the above

Question 12 (5526038):
The _______________ school was very influencial during the Reagan Administration and continues to this day to be an important part of monetary considerations.
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
Monetarist
Correct answer(s):
Monetarist
Keynesian
Utopian Socialist
None of the above

Question 13 (5526010):
The money market determines the interest rate which is a critical factor determining the amount of ________________ (capital spending) and, therefore, the amount of growth in the economy.
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
Business Investment
Correct answer(s):
Consumer Spending
Government deficit
Business Investment
Import buying

Question 14 (5526008):
The ______________ is too powerful to be changed very often because a small change is magnified throughout the banking system.
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s):
Reserve ratio
Correct answer(s):
Discount rate
Reserve ratio
Open Market Operations
None of the above

Question 15 (5526017):
The ____________ of money is determined by spending pressures in the economy.
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s): velocity Correct answer(s): velocity multiplier acceleration none of the above

Question 16 (5526000):
Only funds inside a bank’s vault are counted as part of the M1 money supply.
Type:
True or False
Points awarded:
0.00 / 1.00
Your Answer(s):
True
Correct answer(s):
True
False

Question 17 (5526029):
Monetarists emphasize changes in the money supply as the most important determinant of _____________________________________.
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s): all the above
Correct answer(s): prices employment output all the above

Question 18 (5526020):
A net outflow of dollars resulting from a trade deficit is often returned to the United States for purchase of Treasury bonds that pay a market interest rate with __________ risk.
Type:
Multiple Choice
Points awarded:
0.00 / 1.00
Your Answer(s): high Correct answer(s): high moderate low none of the above

Question 19 (5525996):
In an inflation the money supply can be _____________ by the Fed selling securities.
Type:
Multiple Choice
Points awarded:
0.00 / 1.00
Your Answer(s): increased Correct answer(s): encouraged to grow restrained or decreased increased all the above

Question 20 (5526027):
The quantity theory of money assumes there is a _________ relationship between the quantity of money and the price level.
Type:
Multiple Choice
Points awarded:
1.00 / 1.00
Your Answer(s): strong Correct answer(s): strong weak very loose none of the above