10) Which of the following is NOT an example of expansionary monetary policy? a)

ID: 1155124 • Letter: 1

Question

10) Which of the following is NOT an example of expansionary monetary policy?

a) A reduction in the rate of required reserves.

b) Buying treasury bills.

c) Lending to banks.

d) Decreasing the interest rate.

e) All are examples of expansionary monetary policy.

11) Which of the following is an example of contractionary monetary policy?

a) Increasing capital gains taxes.

b) Decreasing the budget for national defense.

c) Buying treasury bills.

d) a and b.

e) None of the above.

12) The money multiplier

a) Cannot be precisely determined because private banks may choose to keep more reserves than what is mandatory by the rate of required reserves.

b) Cannot be precisely determined because private banks may choose to keep less reserves than what is mandatory by the rate of required reserves.

c) Can be precisely determined because the Fed can precisely target the interest rate.

d) None of the above.

13) Which of the following is an example of contractionary monetary policy?

a) An increase in the rate of required reserves.

b) Buying treasury bills.

c) Selling treasury bills.

d) a, c.

e) a, b.

a) "E"

All the given options are examples of an expansionary monetary supply.

b) "E"

None of the options given here are an example of a contractionary example. The first two options are fiscal policy and third is expansionary.

c) "C"

The Fed can target the interest rates and they can decide the multiplier in the economy.

d) "D"

Options A and C are an example of the Contractionary monetary policy.

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.