Question

34) Considering how monetary policy affects the market, which of the following statements is most accurate?

a) There is a direct impact on aggregate demand by monetary policies.

b) There is more of an impact on consumption than investments by monetary policies.

c) There is an indirect impact on aggregate demand by monetary policies.

35) The Fed's seven member ruling board of Governors are

a) appointed by the president, confirmed by congress, and serve 4-year terms.

b) elected, following congressional confirmation, and serve 14-year terms.

c) appointed by the president, confirmed by congress, and serve 14-year terms.

36) What actions by a bank increase the probability it may face a bank run?

a) It exercises cautions loans behavior with investors.

b) It keeps more of its money it reserves.

c) It is an insolvent bank.

Answer 1

34. c) There is an indirect impact on aggregate demand by monetary policies.

Explanation: Monetary policy directly affects money supply and interest rate which in turn affects aggregate demand.

35. c) appointed by the president, confirmed by Congress, and serve 14-year terms.

Explanation: The President nominates the seven members, the Senate confirms them and they get a 14 years term.

36. c) It is an insolvent bank.

Explanation: An insolvent bank fails to meet the withdrawal demands of its customers.