Question 24 (2 points) Monetary policy is thought to affect the economy through: 1) the business investment channel. O 2) the consumer spending channel. ( 3) the net exports channel. 4) all of these options. Question 25 (3 points) The current 1-year Treasury rate is 10 per cent. It is predicted that the annual inflation rate is going to be 0.50 per cent higher than originally expected. The high inflation forecasts reflect unexpectedly strong macroeconomic conditions. What X F2 F3 F4 F5 F6q | Question 22 (2 points) I | A decrease in reserve requirements will definitely cause: O 1) an increase in the Fed Funds rate. "' 2) inflation expectations to fall. O 3) excess reserves to increase. @ - 4) expenditures to fall. -~ Question 23 (2 points) Saved An increase in the supply of exchange settlement funds (ESF): (o) 1) decreases the cash rate. Question 25 (3 points) The current 1-year Treasury rate is 10 per cent. It is predicted that the annual inflation rate is going to be 0.50 per cent higher than originally expected. The higher inflation forecasts reflect unexpectedly strong macroeconomic conditions. What is the current inflation premium? (Assume that the real rate of interest is 9.0 per cent.) o0y /1) 0.5%. . ) 2) 19 0. O 3) 1.5%. " 4) 11%. Previous Page Next Page Page S of 5 m 1 of 25 questions saved