in the whole banking system of a. $500 b. $1000 c. $1500 d. $2500 e. $5000 2. Th

ID: 1248167 • Letter: I

Question

in the whole banking system of

a. $500

b. $1000

c. $1500

d. $2500

e. $5000

2. The central bank of the US consists of

a. one Federal Reserve bank for each state

b. seven state banks and one Federal Reserve bank for each major city

c. tweleve Federal Reserve district banks

d. one centralized Federal Reserve bank in NY

e. the ten largest national banks in the US

3. The ultimate goal of monetary policy is

a. interest rate stability

b. economic growth with low inflation

c. zero unemployment

d. a favorable exchange rate of the dollar

e. a stable money supply

4. Monetary policy tools include all the following except

a. changing interest rate celings

b. selling government bonds

c. determining the discount rate

d. buying government bonds

e. changing the reserve requirement

#28/29

5. The money demand function is negativiely sloped because

a. the quantity of money demanded rises as transactions demand skill

b. the quantity of money demanded rises as normal income falls

c. the quantity of money demanded rises as the interest rate falls

d. speculate demand for money rises as the interest rate rises

e. the interest rate rises as the general price level falls

1.E 2.C 3.B 4.A 5.C 28.C 29.C

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