Question 8
The key decisions of the Federal Reserve are mostly handled by: (12.4 Central Banks and the Federal Reserve System)
A the Federal Deposit Insurance Corporation.
B Wall Street.
C the Federal Open Market Committee.
D the Eurosystem.
Question 9
Excess reserves increased during the Great Recession because the Fed \_\_\_\_\_\_ paying interest on reserves held at the Fed, and market interest rates on safe assets \_\_\_\_\_\_. (12.5 Controlling the Monetary Base and Broader Money Supplies)
A began; fell close to zero
B stopped; fell close to zero
C began; skyrocketed
D stopped; skyrocketed
Question 10
The Federal Reserve has determined that a \_\_\_\_\_\_ inflation target is most consistent with its mandate for stable prices. (15.1 Money Supply, Money Demand, and Interest Rates)
A 5%
B 2%
C -2%
D 10%
Question 11
As interest rates rise, people prefer to hold \_\_\_\_\_\_ and put more of their wealth into \_\_\_\_\_\_ such as bonds and bank certificates of deposit. (15.1 Money Supply, Money Demand, and Interest Rates)
A more cash; stocks
B more cash; interest-earning assets
C less cash; Federal Reserve
D less cash; interest-earning assets