the policy tool of changing reserve requirements is
multiplier is —- and a Fed purchase of a $1.000 bond can increase the money supply by- A. 2.5; $ 2,772 B.2.72 :$ 2,772 C. 2.3; 2,550 D. 2.72; $ 2,584 18. Everything else held constant, an increase in the currency ratio will cause A. The multiplier rise B. The multiplier to remain constant C. The multiplier to decrease D. has no effect on the multiplier 19.. During the bank panics of the Great Depression, the currency reserve ratio A. Increased slightly B. Decreased sharply C. Increased sharply D. Decreased slightly CHAPTER 15- TOOLS OF THE FED 20. The most used and successful conventional tool is A. Reserve requirements B. The discount rate C. Interest on reserves (D)Open market operations 21. Which of the following would be considered a nonconventional monetary tool? A Open market operations B. Reserve requirements C. The discount rate D. Asset purchases by the Fed 22. The most important advantage of discount policy is that the Fed can use it to A. Precisely control the monetary base B. Perform its role as lender of last resort C. Punish banks that have deficient reserves D. Change the value of the multiplier 23. The policy tool of changing reserve requirements is: A. The most widely used B. The preferred tool from the bank's perspective C. No longer used D. Still used but only occasionally 24. The demand for reserves curve takes a horizontal shape when A. The Fed Funds rate equals 2% B'he Fed Funds rate equals the discount rate C. The Fed funds rate equals the interest rate paid to commercial banks on reserves D. The discount rate equals 5% 25. Everything else held constant in the market for reserves, when the Fed funds rate is 3%, raising the discount rate from 5% to 6% A. Lowers the Fed Funds rate B. Raises the Fed Funds rate C. Has an indeterminate effect on the Fed Funds rate D. has no effect on the Fed Funds rate 26. The supply of reserves curve takes a horizontal shape when A. The Fed funds rate equals the discount rate B. The Fed funds rate is 7% or greater C. The Fed funds rate is equal to the interest on reserves D. The discount rate is very high CHAPTER 16- THE CONDUCT OF MONETARY POLICY- STRATEGY & TACTICS

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