88. Ch anges in an operating a. A policy goal, such as real GDP b. A policy inst

Question

88. Ch anges in an operating a. A policy goal, such as real GDP b. A policy instrument, such as inflation c. An intermediate target, such as real GDP d. An operating goal, such as savings target, such as the federal funds rate, is designed to impact 89. Which of the following correctly depicts the relation a. Policy goals drive policy instrument use b. Policy instru among policies and targets? ments affect operating targets which impact intermediate targets to achieve a policy goal c. Intermediate goals determine which targets impact the policy instrument d. All of the above 90. A policy instrument available to the Fed to reduce a negative output gap (unemployment) would be a. Exchange rates b. Tax rates c. Interest rates d. Open market operations 91.The correct policy instrument action taken by the Fed to reduce a negative output gap would be a. Sell securities b. Buy securities c. Raise tax rates d. Lower the exchange rate 92. The intermediate target that the Fed's action is designed to impact to reduce the negative output gap is a. Real GDP b. Inflation c. Net exports d. Economic growth 93. The pollcy goal that the Fed is tryýing to achieve to reduce a negative output gap is a. Economic growth b. Full-employment c. Stable prices d. Increased exports 94. The economist who was very critical of fiscal policy, and believed that the economy should be left alone and allowed to self-adjust, is a. John Maynard Keynes b. Milton Friedman c. Charles Engles d. Karl Marx 95. The economist reference in the question above, was instrumental in promoting a. Fiscal policy b. Discretionary policy c. Monetary Policy and Monetarism d. Communism

Explanation / Answer

88) Any change in federal target is a form of monetary policy in order to control money supply(either decrrease or increase money supply). Such policy aims to measure either inflation or recession. hence option b is correct.

89) d all of the baove

90) Reducing the interest would reduce output gap. Option c

91) Negative output gap indicates inflationary pressure. To correct it selling securities would be policy instrument. Option a.

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