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Fed's policy instruments

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50 questions on basic macroeconomics. This study guide is focus on Monetary Policy, Trading with the world, and International Finance. Ref. Economics, Seventh Edition. by Michael Parkin.

Please see the attached file.
1. Which of the following is one of the Fed's policy instruments?
a. help the President win reelection
b. discount rate
c. monetary base
d. price level stability

2. In general, the monetary policy record since 1971 has shown
a. an increase in government spending.
b. a decrease in the discount rate.
c. increases in M2 as presidential elections approach.
d. overall declines in interest rate.

3. An example of a monetarist fixed-rule policy would be
a. "every time GDP decreases, decrease the growth rate of the
quantity of money."
b. "every time GDP decreases, increase the growth rate of the
quantity of money."
c. "do not change the growth rate of the quantity of money."
d. "use all information available to determine the growth rate of
the quantity of money each time GDP changes."

4. If the Fed follows a feedback-rule monetary policy and aggregate demand decreases, the Fed
a. increases the growth rate of the quantity of money.
b. does not change the quantity of money.
c. decreases the growth rate of the quantity of money.
d. None of the above answers is correct.

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