Question 1

If the Federal Reserve decreases the Federal funds rate, other short-term interest rates ________ and the exchange rate ________.

Accepted Answer

A)  fall; falls
B)  do not change; rises
C)  fall; does not change
D)  fall; rises
E)  do not change; fallsF) C) and D)
G) B) and E)

Question 2

Needs-tested spending

Accepted Answer

A)  increases in recessions and decreases in expansions.
B)  decreases in recessions and increases in expansions.
C)  does not change with the level of economic activity.
D)  is always increasing regardless of whether we are in an expansion or a recession.
E)  cannot be changed unless the government changes the spending laws.F) B) and D)
G) A) and D)

Question 3

When there is a threat of inflation in the economy, the Fed can ________ the federal funds rate so to ________ aggregate demand and ________ the price level.

Accepted Answer

A)  lower; increase; decrease
B)  raise; decrease; increase
C)  lower; increase; increase
D)  raise; decrease; decrease
E)  raise; increase; decreaseF) A) and C)
G) C) and D)

Exam 20: Fiscal Policy and Monetary Policy

If the Federal Reserve decreases the Federal funds rate, other short-term interest rates and the exchange rate .

Correct Answer
verified

Needs-tested spending

Correct Answer
verified

When there is a threat of inflation in the economy, the Fed can the federal funds rate so to aggregate demand and the price level.

Correct Answer
verified

Exam 20: Fiscal Policy and Monetary Policy

If the Federal Reserve decreases the Federal funds rate, other short-term interest rates ________ and the exchange rate ________.

Correct AnswerverifiedShow Answer

Needs-tested spending

Correct AnswerverifiedShow Answer

When there is a threat of inflation in the economy, the Fed can ________ the federal funds rate so to ________ aggregate demand and ________ the price level.

Correct AnswerverifiedShow Answer

If the Federal Reserve decreases the Federal funds rate, other short-term interest rates and the exchange rate .

Correct Answer
verified

Correct Answer
verified

When there is a threat of inflation in the economy, the Fed can the federal funds rate so to aggregate demand and the price level.

Correct Answer
verified