H THIS IS THE QUESTIONS

Problem 35. What is true about the short run in the AS-AD model? More than one answer is possible. (a) The short-run AS curve is vertical. (b) Aggregate demand shifts largely affect output in the short run. (c) The concept of scarcity is crucially important in the short run. (d) It is possible for government expansionary monetary policy to boost output in the short run. (e) Technological progress is so rapid that it is the dominant cause of changes in output.

Problem 36. Which of these are tools used by the Federal Reserve? That is, over which of these factors does the Fed have direct control? (a) Federal funds rate (ffr) (b) Reserve requirements (c) Money supply (d) Bank reserves (e) Full employment (f) Economic growth (g) Discount Rate (h) Open Market Operations (OMO) (i) Balance of payments (j) Price stability (k) Interest rate (l) Exchange rate (m) 90-day T-Bill rate

Problem 37. Which of these are instruments used by the Federal Reserve? That is, what do the tools of the Fed above most directly affect? (a) Federal funds rate (ffr) (b) Reserve requirements (c) Money supply (d) Bank reserves (e) Full employment (f) Economic growth (g) Discount Rate (h) Open Market Operations (OMO) (i) Balance of payments (j) Price stability (k) Interest rate (l) Exchange rate (m) 90-day T-Bill rate

Problem 38. Which of these are targets used by the Federal Reserve? That is, which of these does the Fed try to affect in an effort to reach its goals? (a) Federal funds rate (ffr) (b) Reserve requirements (c) Money supply (d) Bank reserves (e) Full employment (f) Economic growth (g) Discount Rate (h) Open Market Operations (OMO) (i) Balance of payments (j) Price stability (k) Interest rate (l) Exchange rate (m) 90-day T-Bill rate

Problem 40. Which of these are functions of the Federal Reserve? More than one answer is possible. (a) Source of monetary stabilization policy. (b) Provider of Federal Deposit Insurance. (c) Regulator of banks. (d) Regulator of the government. (e) Bank for banks. (f) Bank for the government. (g) Regulator of wages and prices. (h) Debt financing of the federal budget deficit. (i) Source of fiscal policy. (j) Watchdog agency monitoring Congress and executive departments. (k) Benefactor of the poorest and least privileged members of society.

Problem 41. What is the discount rate? (a) The amount of funds that a depository institution must hold in reserve against deposit liabilities. (b) The rate other banks in the Federal Reserve system charge each other for overnight loans. (c) The rate at which the Fed charges banks for overnight loans. (d) The rate which the Fed charges the government for loans. (e) The target interest rate which the Fed seeks to bring about. (f) The currency-deposit ratio that the Fed mandates for the economy.

Problem 42. Which of these statements about the federal funds rate (ffr) are true? More than one answer is possible. (a) The ffr rate other banks in the Federal Reserve system charge each other for overnight loans. (b) The ffr is the rate at which the Fed charges banks for overnight loans. (c) The ffr is the rate which the Fed charges the government for loans. (d) The ffr is most often greater than the discount rate. (e) The ffr is most often less than the discount rate. (f) The ffr is the same as the discount rate

Problem 43. In which of these situations would high-powered money be created? More than one answer is possible. (a) The Fed purchases gold and pays by adding liabilities to its balance sheets. (b) There are no excess bank reserves, and the Fed increases the reserve requirement on banks. (c) The amount of currency in the economy declines sharply. (d) The Fed purchases government securities and pays by adding liabilities to its balance sheets. (e) The Fed purchases foreign currency and pays by adding liabilities to its balance sheets. (f)The Fed sells government securities, collects the monetary proceeds, and keeps the money in its vaults.