Economics > EXAM > Monetary Economics (ECS3701) Selected Examination Questions and suggested solutions ch: 5 (All)
Fed can stimulate the economy by... - -creating a loose-money policy and engages in: (increasing level of spending) 1.) buying government securities 2.) lowering the discount rate 3.) lowering the... reserve requirement -The Fed can constrain economic activity when... (correcting high inflation) - -it creates a tight money policy and: (reduce money supply) 1.) sells government securities 2.) raises the discount rate 3.) increases the reserve requirement -the trade off in monetary policy - -Studies indicate there exists an inverse relationship between inflation and unemployment: -the lower the unemployment, the greater the inflation, -the higher the unemployment, the lower the inflation -When inflation is high - --tight money policy is considered. -Tradeoff is higher unemployment -When unemployment is high - --loose-money policy is considered. -Trade off is higher inflation [Show More]
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Assets are things that are useful or things that have value. T or F. - -True -One of the most important prices determined in financial markets is the __________________ rate. - -interest -When a...
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1. The exchange rate is ____________________________________________ A) the price of one currency relative to gold. B) the value of a currency relative to inflation. C) the change in the value of m...
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