In the event of a recession, which of the following is the most likely policy stance of those who advocate a passive approach to economic policy?
a. Cutting taxes
b. Increasing government spending
c. Reducing interest rates
d. Increasing the money supply
e. Doing nothing
QUESTION 2Before 2008, money market mutual funds and hedge funds had been out of Fed's scope and control because they did not rely on customer deposits.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3The Dodd-Frank Act gave the Fed and the FDIC expanded oversight of large financial institutions, including those that were not depository institutions.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4Since the Federal Reserve was established in 1913, the U.S. has experienced three periods of high inflation and each was preceded and accompanied by a period of sharp decline in the money supply
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5When the Fed is targeting the money supply, it has complete control over the interest rate.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6A wider use of charge accounts and credit cards have reduced the demand for walking-around money.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7An identity is a relationship expressed in such a way that it is true by definition.
a. True
b. False
Indicate whether the statement is true or false
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