YollOwing l tile are powers of the Federal Reserve System except a. the ability
ID: 1126158 • Letter: Y
Question
YollOwing l tile are powers of the Federal Reserve System except a. the ability to buy and sell government bonds b. the authority to issue Federal Reserve notes (paper bills) c. to extend loans to member banks d. to balance the federal government's budget 20. The actions of the Fed a. must be approved by the president b. must be approve d by the congress c. must be approved by the president and the congress d. are not subject to approval by any branch of government 21. The amount of money (as defined by M1) in the economy increases when a. an individual switches from a saving account to a checking account b. an individual purchases clothes with a credit card c. an individual cashes a check written by a business d. none of the above 22. How does money function as a unit of account? money is convertible into commodities that have intrinsic value b. the price of goods and services are measured in terms of money c. bank accounts make it easy for people to store their wealth d. all of the above PartI 1-AD & AS Model Assume that the economy is at flat (Keynesian) segment of aggregate supply curve. The Fed pursues an expansionary monetary policy. What happens to: a-The price level? b-Real GDP? Now assume that the economy is at the upward sloping (intermediate) segment of aggregate supply curve. What happens to a-The price level? b- The employment rate? 2-The Short-Run Phillips Curve that the economy is stable and operating at its potential output. Assume The Fed pursues a contractionary monetary policy, what happens to a-The inflation rate? b-The unemployment rate? c-The potential output?Explanation / Answer
20) The answer is D-) are not subject to approval by any branch of government
that is Fed does not need to get approval for the actions taken by any branch of government.
21) The answer is A -) an individual switches from saving account to checking account.
because M1 does not include saving account. M2 includes saving account and checking account. so when an individual switch from saving account to checking account, the value of m1 would increase but M2 does not change.
22) The answer is D-) all of the above.
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