1. A restrictive monetary policy by the Fed should lead to:
A. A decrease in investment and an increase in aggregate demand.
B. Leave investment unchanged but decrease aggregate demand.
C. An increase in investment and an increase in aggregate demand.
D. A decrease in investment and a decrease in aggregate demand.
2. When the Federal Reserve uses open market operations (OMO) in an expansionary monetary policy:
A. The Fed will purchase stocks from banks, increasing the monetary base.
B. The Fed will buy bonds from banks, increasing bank reserves and increasing the monetary base.
C.The Fed will lower taxes and increase government spending.
D. The Fed will decrease the discount rate, decreasing the monetary base.
3. A primary goal of monetary policy is to:
A. Eliminate trade barriers from other nations.
B. Maintain high interest rates.
C. Reduce the size of the banking sector.
D. Prevent high rates of inflation.
4. The major tools of monetary policy available to the Federal Reserve System involve:
A. Reserve requirements and tax policy.
B. Reserve requirements and open-market operations.
C. The discount rate and exchange rates.
D. Open-market operations and changing government spending,
1. A restrictive monetary policy by the Fed should lead to:
A. A decrease in investment and an increase in aggregate demand.
B. Leave investment unchanged but decrease aggregate demand.
C. An increase in investment and an increase in aggregate demand.
D. A decrease in investment and a decrease in aggregate demand.
2. When the Federal Reserve uses open market operations (OMO) in an expansionary monetary policy:
A. The Fed will purchase stocks from banks, increasing the monetary base.
B. The Fed will buy bonds from banks, increasing bank reserves and increasing the monetary base.
C.The Fed will lower taxes and increase government spending.
D. The Fed will decrease the discount rate, decreasing the monetary base.
3. A primary goal of monetary policy is to:
A. Eliminate trade barriers from other nations.
B. Maintain high interest rates.
C. Reduce the size of the banking sector.
D. Prevent high rates of inflation.
4. The major tools of monetary policy available to the Federal Reserve System involve:
A. Reserve requirements and tax policy.
B. Reserve requirements and open-market operations.
C. The discount rate and exchange rates.
D. Open-market operations and changing government spending,
