If unemployment is the major problem in the economy, which of the following would be an appropriate monetary policy response?
a. decrease the required reserve ratio
b. decrease the interest rate the Fed pays on bank reserves
c. buy government bonds
d. all of the above
d
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Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to rise and monetary base to rise. b. Demand for real goods and services to remain the same and M2 money supply to remain the same. c. Demand for real goods and services to remain the same and M2 money multiplier to rise. d. Demand for real goods and services to rise and monetary base to remain the same.
The Federal Open Market Committee (FOMC) of the Federal Reserve System is primarily for:
A. Maintaining cash reserves that can be used to settle international transactions B. Supervising banks to make sure that markets are open to all and remain competitive C. Issuing currency and acting as the fiscal agent for the Federal government D. Setting the Fed's monetary policy and directing the purchase and sale of government securities