QUESTION 41 Unless the unemployment rate is zero percent the FOMC is failing in

Question

QUESTION 41

Unless the unemployment rate is zero percent the FOMC is failing in its statutory mandate.

True

False

1.96078 points   

QUESTION 42

During normal economic times, the Federal Reserve has primarily influenced overall financial conditions by adjusting the federal funds rate. The Fed Funds rate is the rate the U.S. Government charges banks for short term credit.

True

False

1.96078 points   

QUESTION 43

When short- and long-term interest rates go down, it becomes cheaper to borrow, so households are generally more willing to buy goods and services and firms are likely to be in a better position to purchase items to expand their businesses, such as property and equipment. This will lead to more hiring.

True

False

1.96078 points   

QUESTION 44

In 2008, with short-term interest rates essentially at zero and thus unable to fall much further, the Federal Reserve undertook nontraditional monetary policy measures to provide additional support to the economy. Between late 2008 and October 2014, the Federal Reserve purchased longer-term mortgage-backed securities and notes issued by certain government-sponsored enterprises, as well as longer-term Treasury bonds and notes. The primary purpose of these purchases was to help to lower the level of longer-term interest rates, thereby improving financial conditions. Thus, this nontraditional monetary policy measure operated through the same broad channels as traditional policy, despite the differences in implementation of the policy.

True

False

1.96078 points   

QUESTION 45

The Federal Reserve purchases new Treasury securities directly from the U.S. Treasury. This assures the government that they can always finance deficits at reasonable interest rates.

True

False

1.96078 points  

Explanation / Answer

41. FALSE. The reason being, some level of unemployment will always be there as there will always be people who would keep quitting or starting new job.

42. The fed funds rate is the rate that financial institutions charge each other for overnight Lending.

It’s the discount rate that US government charges.

FALSE

43. TRUE

44. True

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.