Question

35. Which of the following summarizes the President's and Congress' role in conducting monetary policy? a....

35. Which of the following summarizes the President's and Congress' role in conducting monetary policy?

a. Congress and the president do not play a role in conducting monetary policy.

b. Both the president and Congress determine the level of funds that the Federal Reserve needs to operate, and thereby influence policy.

c. The president submits input to the chairman of the Board of Governors of the Federal Reserve and the Board of Governors votes on it.

d. Congress directs the Federal Reserve on what its interest rate targets should be.

36. If the probability of losing your job remains ________, a recession would be a good time to purchase a home because the Fed usually ________ interest rates during this time.

low; lowers

low; raises

high; lowers

high; raises

low; does not change

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Answer #1

35. Option A.

The president and Congress do not play any role in conducting monetary policy.

The monetary policy is usually conducted by the Central Bank of a country.

It is conducted by the Fed or the Federal Reserve in the United States. The Fed is responsible for stimulating the economy by regulating the money supply and interest rates within the economy.

36. Option A.

Given that the probability of losing job remains low in a nation.

During this time, even if the country is facing a recession people will not face much problems.

They will be able to purchase a home because during recessions, the Fed usually uses an expansionary monetary policy.

It increases the money supply and lowers the interest rate within the economy which leads to an increase in the aggregate demand.

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