11.A decrease in the monetary base is related to
a.decrease in credit availability.
b.increasing interest rates.
d.all of the above
12.A decrease in reserve requirements will definitely cause
a.expenditures to fall.
b.inflation expectations to fall.
c.an increase in the Fed Funds rate.
d.excess reserves to increase.
13.Sustained open market buying by the Fed will cause
a.the Fed Funds rate to rise.
b.planned inventory investment to fall.
c.depository institutions to lend more freely.
d.foreign investors to buy more T-Bills.
14.An expansion in the U.S. money supply
a.will increase domestic interest rates
b.will cause the exchange value of the dollar to increase.
c.will cause U.S. exports to increase.
d.will cause U.S. imports to increase.
15.If the money supply increases too rapidly
a.inflationary expectations will rise.
b.government spending will decrease.
c.bank lending will decrease.
d.investment spending will fall.
16.Unemployment should fall if
a.wages increase and people expect prices to rise, too.
b.wages increase and people expect prices to be stable.
c.interest rates rise more than prices are expected to rise.
d.the money supply decreases.
17.An contraction in the U.S. money supply should
a.increase domestic interest rates
b.cause the exchange value of the dollar to increase.
c.cause U.S. exports to decrease.
d.all of the above.
18.The intended longer run impact of monetary policy is
a.to lower interest rates.
b.to raise security prices.
c.to influence change consumption and investment spending.
d.to reduce government spending.
19.Monetary policy impacts the economy
a.by affecting real spending directly.
b.by affecting real spending through the financial sector.
c.by changing interest rates and the cost of housing.
d.all of the above
20.Restrictive monetary policy first impacts the market, security prices and interest rates.
a.money, increasing, decreasing
b.capital, increasing, decreasing
c.money, decreasing, increasing
d.mortgage, increasing, decreasing