For each statement below, answer whether the statement

is true, false, or uncertain for the U.S economy. Briefly explain your answer.

(1) A fall in the prime mortgage rate occurred just before the GDP fell in every recession

after 1970.

(2) Not all types of investments move in the same direction as real GDP.

(3) Over a long term, say, from 1982 to 2006, growth in the residential property price

outpaced growth in real GDP.

(4) Percentage changes in the unemployment rate and real GDP are similar.

(5) In the Great Recession, the U.S. Treasury and the FED bought only asset backed

and mortgaged backed securities.

(6) Between August 2007 and January 31, 2008, the FOMC reduced the target of the

Fed Funds rate by more than 275 basis points.

(7) TARP is a program that allowed the U.S. Treasury to sell its bonds to the Federal

Reserve system at artificially high prices.

(8) In Phase 3 of quantitative easing, the FED was committed to open-ended purchases

of more than $30 billion per month of agency MBS.

(9) Buying in the Federal Funds market means that a depository institution uses reserves

to buy Treasury securities.

(10) Fed Funds are reserves that the Federal Reserve makes available at the discount

window.

(11) If a banks transaction account has a balance less than $8 million, the bank is not

required to maintain positive reserves by the reserve requirement.

(12) To borrow and lend in the Fed funds market, a bank puts up collateral.