DO NOT TYPE THE WHOLE ANSWER, JUST THE LETTER ITSELF.

When conducting monetary policy and open market operations, the Federal Reserve specifically establishes a target for what variable?

Select one:

a.

The prime rate

b.

The desired reserve ratio of banks

c.

The rate of inflation

d.

The federal funds rate

Fiscal policy is:

Select one:

a.

not effective in dealing with either real shocks or aggregate demand shocks

b.

more effective in dealing with real shocks than aggregate demand shocks.

c.

equally effective in dealing with real shocks as with aggregate demand shocks.

d.

less effective in dealing with real shocks than aggregate demand shocks.

Which of the following is appropriate monetary policy given a recession from a negative AD shock?

Select one:

a.

Buy government securities through open market operations

b.

Increase interest paid on reserves held at the Fed

c.

Increase the amount of required reserve ratio

d.

Increases the discount rate

Which of the following are concerns regarding expansionary fiscal policy, i.e. the increase in government spending and decreases in taxes

Select one:

a.

it will cause deflation

b.

It will increase budget deficits and the national debt

c.

it will decrease wages

d.

It will create asset bubble

Which of the following is true regarding the Federal Reserve

Select one:

a.

They are a branch of the Federal Government under the U.S. treasury

b.

It's board members are elected by the people living in the bank's district

c.

The members of the Board of Governors are appointed by the President of the United States

d.

It is charged with collecting taxes

Which is the LEAST liquid asset?

Select one:

a.

currencies

b.

savings deposits

c.

small-time deposits

d.

checkable deposits