Question

1. In the short-run, the economic variable(s) that the Federal Reserve has significant effect on is (are)

A) inflation.       B) output.          C) unemployment.           D) A & B only.       E) A, B, & C.

2. In the long-run, the economic variable(s) that the Federal Reserve can affect is (are)

A) inflation.       B) output.          C) unemployment.           D) A & B only.       E) A, B, & C.

3. Which of the following instruments would most likely be utilized in the direct finance market?

A) Bank commercial loans.                                   B) Commercial Paper.

C) State and local government bonds.                     D) Equities.

4. Which of the following items would be considered a part of M1 but not part of M2?

A) Small denomination time deposits.

B) Savings deposits.

C) Checkable deposits.

D) All of the above would be considered a part of M1 but not part of M2.

E.)None of the above would be considered a part of M1 but not part of M2.

Answer 1

1.E

In short run all variables can be affected.

2. A

In long run only price level is affected.

3. B

Commercial paper is most likely to be your in direct finance market.

4. E

M2 includes all elements of M1