Question

MILLER Question 01: Who are the voting members of the Federal Open Market Committee (FOMC) which meets about every seven weeks or so? a) Just the seven-member Board of Governors of the Federal Reserve. b) The seven-member Board of Governors of the Federal Reserve and the 12 regional bank Presidents c) The seven-member Board of Governors and the New York regional President d) The seven-member Board of Governors, the New York regional President, and 4 other regional bank Presidents on a rotating basis. years. MILLER Question 02: Each member of the Board of Governors has how long a term? These long terms isolate the Board of Governors from politics, similar to judges appointed for life. This way the "Fed" will not be tempted to do what is in the interest of one political party or another, but what is best for the economy. MILLER Question 03: Refer to the diagram to the right. Let's say the economy is currently at short-run equilibrium point "e" with Aggregate Demand ADo. Our original price level is Po and Real Output of GDP is Qo. If the "Fed" engages in an expansionary monetary policy shifting Aggregate Demand to AD1, then what will happen? a) The price level will increase somewhat (some inflation) and there will also be an increase in GDP (or real output). b) There will only be an increase in the price level (causing inflation) with no change in GDP (real output). c) There will only be an increase in GDP with no change in the price level.

          MILLER Question 01: Who are the voting members of the Federal Open Market Committee (FOMC) which
meets about every seven weeks or so?
a) Just the seven-member Board of Governors of the Federal Reserve.
b) The seven-member Board of Governors of the Federal Reserve and the 12 regional bank Presidents
c) The seven-member Board of Governors and the New York regional President
d) The seven-member Board of Governors, the New York regional President, and 4 other regional bank
Presidents on a rotating basis.
years.
MILLER Question 02: Each member of the Board of Governors has how long a term?
These long terms isolate the Board of Governors from politics, similar to judges appointed for life. This
way the "Fed" will not be tempted to do what is in the interest of one political party or another, but what
is best for the economy.
MILLER Question 03: Refer to the diagram to the right. Let's
say the economy is currently at short-run equilibrium point "e"
with Aggregate Demand ADo. Our original price level is Po and
Real Output of GDP is Qo. If the "Fed" engages in an
expansionary monetary policy shifting Aggregate Demand to
AD1, then what will happen?
a) The price level will increase somewhat (some inflation)
and there will also be an increase in GDP (or real output).
b) There will only be an increase in the price level (causing
inflation) with no change in GDP (real output).
c) There will only be an increase in GDP with no change in
the price level.

MILLER Question 01: Who are the voting members of the Federal Open Market Committee (FOMC) which
meets about every seven weeks or so?
a) Just the seven-member Board of Governors of the Federal Reserve.
b) The seven-member Board of Governors of the Federal Reserve and the 12 regional bank Presidents
c) The seven-member Board of Governors and the New York regional President
d) The seven-member Board of Governors, the New York regional President, and 4 other regional bank
Presidents on a rotating basis.
years.
MILLER Question 02: Each member of the Board of Governors has how long a term?
These long terms isolate the Board of Governors from politics, similar to judges appointed for life. This
way the "Fed" will not be tempted to do what is in the interest of one political party or another, but what
is best for the economy.
MILLER Question 03: Refer to the diagram to the right. Let's
say the economy is currently at short-run equilibrium point "e"
with Aggregate Demand ADo. Our original price level is Po and
Real Output of GDP is Qo. If the "Fed" engages in an
expansionary monetary policy shifting Aggregate Demand to
AD1, then what will happen?
a) The price level will increase somewhat (some inflation)
and there will also be an increase in GDP (or real output).
b) There will only be an increase in the price level (causing
inflation) with no change in GDP (real output).
c) There will only be an increase in GDP with no change in
the price level.

Added by Christine B.

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