The Feds primary tool to change the moneysupply is A. changing the discount rate

Question

The Feds primary tool to change the moneysupply is

A.   changing the discount rate.
B.   changing the reserve requirement.
C.   conducting open market operations.
D.   redeeming Federal Reserve notes.

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The consumer price index is used to

A.   track changes in the level of wholesale prices inthe economy.
B.   monitor changes in the cost of living.
C.   monitor changes in the level of real GDP.
D.   track changes in the stock market.

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The term inflation is used to describe a situation in which

A.   the overall level of prices in the economy isincreasing.
B.   incomes in the economy are increasing.
C.   stock-market prices are rising.
D.   the economy is growing rapidly.

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The economy's inflation rate is the

A.   price level in the current period.
B.   change in the price level from the previousperiod.
C.   change in the gross domestic product from theprevious period.
D.   percentage change in the price level from theprevious period.

Explanation / Answer

1)Open market operations are the primary tool used toregulate the supply of bank reserves so answer isC) conducting open marketoperations : 2)The consumer price index (CPI) is the most widely usedmeasure of consumer price inflation. The CPI measures the averagechange over time in the prices paid by urban consumers for goodsand services. It measures changes at the wholesale not retail levels. anwer is  A) track changes in thelevel of wholesale prices in the economy. : 3)Inflation is the term used to describe a rise of averageprices through the economy. It means that money is losing its valueA) the overall level of prices in the economy isincreasing
4)In economics, inflation is a rise in the generallevel of prices of goods and services in an economy over a periodof time. A chief measure of general price-level inflation is thegeneral inflation rate, which is the percentage change in a generalprice index normally the CPI over time so answer isD.  percentage change in the pricelevel from the previous period.

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