ECON 2101 Chapter 15 (questions
and answers)
The Federal Reserve's four goals of monetary policy are - answer price
stability, high employment, economic growth, and stability of financial
markets and institutions
Monetary policy refers to the actions the - answer Federal Reserve takes to
manage the money supply and interest rates to pursue its economic
objectives
Refer to the diagram to the right. Suppose the economy is in short run
equilibrium above potential GDP, the unemployment rate is very low, and
wages and prices are rising. Using the static ADminus−AS model, the correct
Fed policy for this situation would be depicted as a movement from - answer
C to B
Which of the following would cause the money demand curve to shift to the
left? - answer a decrease in real GDP
Contractionary monetary policy on the part of the Fed results in - answer a
decrease in the money supply, an increase in interest rates, and a decrease
in GDP.
The Federal Reserve's two main monetary policy targets are - answer the
money supply and interest rates
To reassure investors who were unwilling to buy mortgages in the secondary
market, the U.S. Congress used two government sponsored enterprises,
Fannie Mae and Freddie Mac, to stand between investors and banks that
grant mortgages. Fannie Mae and Freddie Mac - answer sell bonds to
investors and use the funds to purchase mortgages from banks.
and answers)
The Federal Reserve's four goals of monetary policy are - answer price
stability, high employment, economic growth, and stability of financial
markets and institutions
Monetary policy refers to the actions the - answer Federal Reserve takes to
manage the money supply and interest rates to pursue its economic
objectives
Refer to the diagram to the right. Suppose the economy is in short run
equilibrium above potential GDP, the unemployment rate is very low, and
wages and prices are rising. Using the static ADminus−AS model, the correct
Fed policy for this situation would be depicted as a movement from - answer
C to B
Which of the following would cause the money demand curve to shift to the
left? - answer a decrease in real GDP
Contractionary monetary policy on the part of the Fed results in - answer a
decrease in the money supply, an increase in interest rates, and a decrease
in GDP.
The Federal Reserve's two main monetary policy targets are - answer the
money supply and interest rates
To reassure investors who were unwilling to buy mortgages in the secondary
market, the U.S. Congress used two government sponsored enterprises,
Fannie Mae and Freddie Mac, to stand between investors and banks that
grant mortgages. Fannie Mae and Freddie Mac - answer sell bonds to
investors and use the funds to purchase mortgages from banks.
