Select the best answer for each question and mark your choice on both the test booklet and on the answer card. Assume that the Fed wishes to increase M-2 by 220. The Fed could keep the size of M-2 constant in the face of an increase in k by a. increasing the size of t b. increasing rr c. decreasing the size of t d. decreasing rr 5.
Debt monetization occurs when a.
General Motors retires debt 6. Other things being equal, an increase in interest rates tends to cause e to a. rise b. fall c. remain unchanged d. change in a direction that can't be predicted 7. In a rare move between meetings of the Federal Open Market Committee, last month the Fed a. lowered both the discount rate and the target for the federal funds rate b. lowered the discount rate, while leaving the target for the fed fund rate unchanged c. lowered the fed funds rate target, while leaving the discount rate unchanged d. raised the discount rate and lowered the target for the fed funds rate 10. Last week the Department of Commerce published the first estimate for the real rate of growth of GDP during the third quarter of 1998. The estimated rate was closest to a. 0 percent b. 2 percent c. 4 percent d. 6 percent 11.