1. To get a loan from the federal reserve, a bank can: A. indirectly from anothe
ID: 1222595 • Letter: 1
Question
1. To get a loan from the federal reserve, a bank can:
A. indirectly from another member bank B. borrow directly from the Treasury Department C. appeal to the president D. None of the answer are correct
2. Which of the following economies did not experience a financial crisis in the last twenty years
A. Russia B. India C. Argentina D. Mexico
3. In 2007-2008, the Fed deviated from the Taylor rule because as inflation rose over that period, the Fed:
A. raised the prime leding rate B. cut the federal funds rate C. increased the discout rate D. lowered taxes
4. the liquidity crisis of 2007:
A. was circumscribed to the United state only B. meant that many banks had trouble raising funds C. put dowwart pressure on the federal funds rate D. All of answer are correct
5. Some economists argue that the Federal Reserve made the Great Depression ___ than it could have been by ___ the money supp;y
A. less severe; increasing B. less severe; reducing C. Worse ; increasing D. Worse; reducing
Explanation / Answer
1. Option B is correct.
Treasury department works under the government and undertakes the task of managing treasury (revenue and expenditure) of the government.
2. Option B is correct.
India has more or less been relatively less open economy because of which it has experienced less shocks due to outside volatality.
3. Option B is correct.
The US fedreal rates were lowered drastically and deviated from the taylor rule as the inflation rose.
4. Option B is correct.
Due to liquidity crisis, the banks had gone bankrupt due to which they had a tough time raising funds
5. Option C is correct.
Some economists argued that had th monetary policy been less restrictive then the economy would have faced less severe depression. As there was a liquidity crunch, easy of money supply was required in the economy which would have made the situation better.
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