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Financial Markets and Institutions 12th Edition Madura Test Bank 1
Financial Markets and Institutions 12th Edition Madura Test Bank 1
2. The Fed can ____ the level of spending as a means of stimulating the economy by ____ the money supply.
a. increase; decreasing
b. decrease; increasing
c. decrease; decreasing
d. increase; increasing
ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.04
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
4. According to the theory of rational expectations, higher inflationary expectations encourage businesses and households
to reduce their demand for loanable funds.
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Chapter 05: Monetary Policy
a. True
b. False
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Application
5. A passive monetary policy adjusts the money supply automatically in response to economic conditions.
a. True
b. False
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
6. If the Fed implemented a policy of inflation targeting, and if the U.S. inflation rate deviated substantially from the Fed's
target inflation rate, the Fed could lose credibility.
a. True
b. False
ANSWER: a
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.03
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
8. A ____-money policy can reduce unemployment, and a ____-money policy can reduce inflation.
a. tight; loose
b. loose; tight
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Chapter 05: Monetary Policy
c. tight; tight
d. loose; loose
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
9. A loose-money policy tends to ____ economic growth and ____ the inflation rate.
a. stimulate; place downward pressure on
b. stimulate; place upward pressure on
c. dampen; place upward pressure on
d. dampen; place downward pressure on
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.03
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
10. When both inflation and unemployment are relatively high, there is more disagreement among FOMC members about
the proper monetary policy to implement.
a. True
b. False
ANSWER: a
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.03
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
11. ____ serves as the most direct indicator of economic growth in the United States.
a. Gross domestic product (GDP)
b. National income
c. The unemployment rate
d. The industrial production index
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
13. The ____ indicators tend to rise or fall after a business cycle.
a. leading
b. lagging
c. coincident
d. none of the above
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
14. The ____ indicators tend to rise or fall at the same time as a business cycle.
a. leading
b. lagging
c. coincident
d. none of the above
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
15. The time lag between when an economic problem arises and when it is reported in economic statistics is the
a. recognition lag.
b. implementation lag.
c. impact lag.
d. open-market lag.
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
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Chapter 05: Monetary Policy
16. The time between when the Fed adjusts the money supply and when the adjustment has an effect on the economy is
the
a. recognition lag.
b. implementation lag.
c. impact lag.
d. open-market lag.
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
17. If the Fed attempts to reduce inflation, it would likely increase money supply growth.
a. True
b. False
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
18. Which of the following best describes the relationship between the Fed and the presidential administration?
a. The Fed must receive approval by the administration before conducting monetary policy.
b. The Fed must implement a monetary policy specifically to the support the administration's policy.
c. The administration must receive approval from the Fed before implementing fiscal policy.
d. A and C
e. none of the above
ANSWER: a
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.03
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
19. A high budget deficit tends to place ____ pressure on interest rates; the Fed's tightening of the money supply tends to
place ____ pressure on interest rates.
a. upward; upward
b. upward; downward
c. downward; downward
d. downward; upward
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Chapter 05: Monetary Policy
ANSWER: a
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.03
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
20. The Fed is usually more willing to maintain a stimulative monetary policy when inflation is relatively high.
a. True
b. False
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.04
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
21. Costner National, a commercial bank, obtains short-term deposits and makes long-term fixed-rate loans. It should be
adversely affected when the Fed:
a. purchases Treasury securities.
b. maintains a stable money supply.
c. uses a tight-money policy.
d. uses a loose-money policy.
ANSWER: c
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Application
22. The ____ lag is the time from when an economic problem arises until it is recognized.
a. Recognition
b. Adjustment
c. Implementation
d. none of the above
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
23. A ____ dollar tends to exert inflationary pressure in the United States.
a. Stable
b. Strong
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Chapter 05: Monetary Policy
c. Weak
d. both A and B
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.05
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
24. There is some evidence that high money supply growth may lead to _______ U.S. inflation over time, which in turn
places ____ pressure on U.S. interest rates.
a. higher; upward
b. higher; downward
c. lower; downward
d. lower; upward
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
25. If the Fed uses a passive monetary policy during weak economic conditions,
a. it increases the money supply substantially.
b. it reduces the money supply substantially.
c. it allows the economy to fix itself.
d. it purchases commercial paper and mortgage-backed securities.
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
26. Which of the following is true about an increase in the U.S. government’s budget deficit?
a. It will lead to global crowding out if U.S. interest rates fall below the level of interest rates in other countries.
b. It will cause outflows of foreign funds from the United States as foreign investors move their funds to other
countries.
c. It will cause an inward shift in the aggregate demand for funds curve.
d. None of the above
ANSWER: d
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.03
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
28. According to the theory of rational expectations, if the Fed uses open market operations to increase the supply of
loanable funds, the ultimate effect on interest rates
a. is a reduction in interest rates.
b. is an increase in interest rates.
c. is no effect on interest rates.
d. cannot be determined.
ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
29. The Federal Reserve would be most inclined to use a stimulative monetary policy to cure a recession if oil prices are
a. low and steady
b. low, but rising.
c. very high, but declining slightly.
d. very high and rising.
ANSWER: a
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
30. Global crowding out is described in the text to mean the impact of
a. excessive U.S. population growth on interest rates.
b. excessive global population growth on interest rates.
c. an excessive budget deficit in one country on interest rates of another country.
d. an excessive budget deficit in one country on exchange rates.
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Chapter 05: Monetary Policy
ANSWER: c
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.05
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
32. When the Fed uses open market operations to sell some of its Treasury securities, there will be
a. an outward shift in the supply schedule of loanable funds.
b. an inward shift in the supply schedule of loanable funds.
c. no shift in the supply schedule of loanable funds.
d. an outward shift in the demand schedule for loanable funds.
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
35. According to the theory of rational expectations, higher inflationary expectations encourage businesses and
households to reduce their demand for loanable funds.
a. True
b. False
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
36. During the 2008–2015 period, the Fed reduced the federal funds rate to 6 percent in an effort to stimulate the
economy.
a. True
b. False
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
37. In recent years, the Fed has made an effort to be more transparent in its communications to financial markets about its
future policy.
a. True
b. False
ANSWER: a
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.03
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
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Chapter 05: Monetary Policy
38. The Fed faces a trade-off in monetary policy between reducing unemployment and reducing the federal government’s
budget deficit.
a. True
b. False
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
39. The relationship between the interest rate on loanable funds and the level of business investment is positive.
a. True
b. False
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
40. The supply schedule of loanable funds indicates the quantity of funds that would be demanded at various possible
interest rates.
a. True
b. False
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
41. To correct excessive inflation, the Fed could use open market operations by buying Treasury securities in the
secondary market.
a. True
b. False
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
42. When the Fed wants to encourage businesses to increase their spending on long-term projects, it may use a stimulative
policy focused on reducing long-term Treasury yields.
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Chapter 05: Monetary Policy
a. True
b. False
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.03
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
43. Economists who work at the Fed recognize that a stimulative monetary policy will not always reduce a high
unemployment rate and could even ignite inflation.
a. True
b. False
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
44. An attempt by the Fed to stimulate the economy by reducing short-term interest rates may have a limited effect if
long-term interest rates remain unaffected.
a. True
b. False
ANSWER: a
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
45. The Fed needs the approval of the presidential administration to make decisions.
a. True
b. False
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.03
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
46. The Fed is more likely to use a stimulative policy during a strong-dollar period.
a. True
b. False
ANSWER: a
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Chapter 05: Monetary Policy
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.05
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
47. A purchase of Treasury securities by the Fed leads to a(n) ____ in interest rates and a(n) ____ in the level of business
investment.
a. increase; decrease
b. decrease; decrease
c. increase; increase
d. decrease; increase
ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
48. Which of the following is not true with respect to inflation targeting?
a. The Fed could lose credibility if the inflation rate deviates substantially from the Fed's target inflation rate.
b. A focus on inflation could result in a much higher unemployment rate.
c. Inflation targeting may not only satisfy the inflation goal, but could also achieve the employment stabilization
goal in the long run.
d. If unemployment is slightly higher than normal, while inflation is at the peak of the target range, an inflation
targeting approach would like advocate a loose monetary policy.
ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.03
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
49. A ____ economic indicator tends to rise or fall a few months after business-cycle expansions and contractions.
a. leading
b. coincident
c. lagging
d. none of the above
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
51. The interest rate that the Fed targets for its monetary policy is the:
a. commercial paper rate.
b. federal funds rate.
c. Treasury bond coupon rate.
d. one-year certificate of deposit rate.
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
53. The Fed’s monetary policy is commonly intended to alter the supply of funds in the banking system in order to
achieve a specific targeted:
a. discount rate.
b. required reserve requirement.
c. federal funds rate.
d. prime rate.
ANSWER: c
DIFFICULTY: Easy
54. If a firm has a credit risk premium of 3 percent and the Treasury security rate is 4 percent, the firm will be able to
borrow at ________. If the Fed implements a monetary policy that raises the Treasury security rate to 6 percent, the cost
of borrowing for the firm will be ________.
a. 7 percent; 10 percent
b. 4 percent; 6 percent
c. 7 percent; 9 percent
d. 1 percent; 3 percent
ANSWER: c
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Application
55. In the “operation twist” strategy used in 2011 and 2012, the Fed sold _______ Treasury securities and used the
proceeds to purchase ________ Treasury securities.
a. long-term; short-term
b. short-term; long-term
c. short-term; long-term
d. long-term; short-term
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
56. The intent of the Fed’s operation twist strategy in 2011 and 2012 was to:
a. increase long-term interest rates.
b. require corporations to issue more commercial paper.
c. require bond rating agencies to impose higher standards on their ratings.
d. reduce long-term interest rates.
ANSWER: d
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU.15.05.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
57. Which of the following is not a reason that a stimulative monetary policy may be ineffective?
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Chapter 05: Monetary Policy
58. In 2012, the Fed stated that it would continue to purchase Treasury bonds in the financial markets until GDP growth
increased to a target level.
a. True
b. False
ANSWER: b
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.04
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
59. Which of the following was not true of the eurozone during the Greek crisis?
a. Fear of a financial crisis throughout Europe discouraged investors and firms from moving funds into Europe.
b. By using a more stimulative monetary policy than it desired, the European Central Bank aroused concerns
about potential inflation in the eurozone.
c. There was concern that the austerity conditions could weaken the country’s economy further.
d. Greece, Spain, and Portugal focused their efforts on reducing tax rates in order to stimulate their economies.
ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FMAI.MADU.15.05.05
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
60. The Fed’s purchase of Treasury securities is primarily intended to ensure liquidity in the commercial paper market.
a. True
b. False
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI MADU 15.05.05
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU. 1503
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom’s Knowledge
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Chapter 05: Monetary Policy
61. The Fed’s main focus in the years 2010–2014 following the credit crisis was on controlling inflation.
a. True
b. False
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: FMAI.MADU 15.05.05
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.1503
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom’s Knowledge