Question

answer please

25. A bank borrows money from another bank on an overnight basis to meet reserve requirements in the: a. stock market. b. bond market. c. Federal funds market. d. U.S.Treasury bill market. 26. Fiscal policy in the United States is the responsibility of the: a. US Treasury b. Federal Reserve c. Internal Revenue Service d. US Congress and Administration 27. Monetary policy in the United States is the responsibility of the: b. Federal Reserve a. US Treasury c. Internal Revenue Service d. US Congress and Administration 28. The Federal Reserve could increase the money supply and thus the level of GDP in the short run by: a. selling government bonds on the open market b. buying government bonds on the open market c. raising the discount rate d. raising the reserve ratio 29. A single commercial bank must meet a 109% reserve requirement. If it initially has no excess reserves and then $2,000 in cash is deposited in the bank, it can increase its loans by a maximum of: b. $1,800 a. $2,000 c. $1,600 d. $1,000 e. $200 30. If reserve requirement is 10% and the new deposit is $2,000, as in problem above, the maximum amount by which the commercial banking system can increase the money supply by lending is: a. $18,000 b. S10,000 c. $2,000 d. $200 e. $200,000 31. News: Federal Reserve lowered the target federal funds rate by the end of 2008 from 2% to 1%. This monetary policy can be the Fed's response to: a. problems in the banking industry b. slow job growth c. rising inflation d. possible deflation 32. The major purpose of the Federal Reserve buying government securities in open market operations is to: a. restrict banks' ability to lend b. increase interest rates c. invest money for government spending d. increase bank's ability to lend e. make a profit 33. Fiscal and monetary policymakers often face a tradeoff between: a. work and leisure b. inflation and unemployment C. money and time d. supply and demand 34. As interest rates in the economy go up. a. prices of governme b. stock prices go up bonds go down c. quantity of funds demanded for investment purposes increases d. money supply goes up 35. Assume the economy faces stable employment but there is a danger of rising prices. Which combination of fiscal and monetary policies is most likely to reduce inflation? a. the sale of government securities in the open market and a increase in government spending b. the sale of government securities in the open market and a increase in taxes c. the purchase of government securities in the open market and an increase in taxes d. the purchase of government securities in the open market and an increase in government spending 36. What is one of the advantages of monetary policy over fiscal policy? its control over the size of Federal budget deficits the quickness with which it can be used the opportunity for broad political influence its domination of major sectors of the economy b. d. 37. Find a recent newspaper article that mentions any aspect of the fiscal or monetary policy in the US. White a paragraph in which comment on main issues discussed in the article and why these issues are important. Attach the article to this test, type in the link, or email me the link separately.

Answer 1

25. A bank borrows money from another bank in the federal funds market on an overnight basis to meet it's reserve requirement.

Answer: option C

26. Fiscal policy in the United States is determined by the US congress and administration. The federal reserve plays no role in determining fiscal policy.

Answer: option D

27. Monetary policy in the United States is the responsibility of the federal reserve Bank. It is the Fed's responsibility to implement monetary policy and balance inflation and economic growth.

Answer: option B

28. If federal reserve buys government bonds in the open market in exchange for money, that will increase money supply and thus the level of GDP in the short run.

Answer: option B