Question

T/F 1. The Federal Reserve is one of the least independent in the US government. T/F...

T/F

1. The Federal Reserve is one of the least independent in the US government.

T/F

2. Increase spending growth shifts the AD curve inwards, and decreased spending growth shifts the AD curve outwards.

T/F

3. Monetary policy is more effective at combating real shocks that AD shocks.

T/F

4. Bringing inflation down is more difficult than raising it because wages and prices are sticky downward.

T/F

5. The Federal Reserve must operate in real time, even though a lot of the data about the state of the economy are unknown.

T/F

6. Quantitative easing occurs when the Fed sells longer-term government bonds or other securities.

T/F

7. An insolvent bank has greater liabilities than assets.

T/F

8. Monetary policy is easy if the central bank sticks to a few simple rules of thumb.

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Answer #2

1. The Federal Reserve is one of the least independent in the US government.

False - It is independent.

2. Increase spending growth shifts the AD curve inwards, and decreased spending growth shifts the AD curve outwards.

FAlse - Increase in G leads to increase in AD

3. Monetary policy is more effective at combating real shocks that AD shocks.

FAlse - Monetary policy can combat AD shocks, not real shocks.

4. Bringing inflation down is more difficult than raising it because wages and prices are sticky downward.

True: - Price stickiness makes SRAS fixed.

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answered by: anonymous
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