There is only one correct answer per question. select the best answer, even when there are other correct answers.
There is only one correct answer per question. select the best answer, even when there are other correct answers. If the Fed reduces a commercial bank s reserve requirements the commercial bank can
There is only one correct answer per question. select the best answer, even when there are other correct answers.
1 If the Fed reduces a commercial bank s reserve requirements the commercial bank can
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a lend the extra reserve to the Fed
b Use the extra reserve to create more money
c eliminate its need for overnight lending
d use the extra reserve amount for facility expansion
2 Economics is about
a efficiency
b how to best use money
c resource allocation
d deciding who is affected by taxation
3 The Fed Chairman is
a elected for up to a maximum of 3 terms
b is the principal government officer in charge of all economic policy
c accountable to the President
d none of the above
4 If a price ceiling is set on gasoline nationwide,
a the economy would experience unprecedented prosperity
b most oil companies would go bankrupt
c supply and demand for gasoline will be at dynamic equilibrium
d shortage of gasoline would be likely
5 Monetary policy
a involves running a surplus and deficit
b involves changing money supply and taxes
c is managed by the Treasury Department
d none of the above
6 If a central bank issues large quantities of money, that
a would be inflationary
b is because some central bank lack independence form political control
c is because they feel that the risk of inflation is less than the risk of economic breakdown
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