ECO 320 Final Exam Solutions
Final Exam 1
The FDIC is the main supervisor for
A commercial bank that gets a charter from the federal government is called a ________ bank.
The OCC is the main supervisor for
In regards to the Glass-Steagall Act, banks argued that they
A period when an expansion ends and a recession begins is
A particularly bad recession (in which output declines much more than usual for a recession) is called
The labor-force participation rate equals
According to real business cycle (RBC) theory, the main source of the business cycle is
The liquidity effect is the
A partial-equilibrium model is a model in which
A variable that is determined within a model is called
The price-level effect is the situation when a higher nominal interest rate results from a(n)
A rise in foreign incomes causes net exports to
Full-employment output is the amount of output produced when the economy is
Consumption spending is about ____ of aggregate demand.
The natural rate of unemployment reflects ________ normal job turnover.
General equilibrium is a situation in which all markets are in ________ and all economic agents have made decisions
Precautionary savings is
Because RBC models are complicated, researchers generally
DSGE models that contain many different types of households and firms are known as
Final Exam 2
A shock is
In broad nominal terms, the dollar ____ against other currencies from 1988 to 2001 and ____ from 2001 to 2008.
Under absolute purchasing-power parity,
The sum of net exports of goods and services plus net income from abroad plus net unilateral current transfers equals
Federal Reserve Banks are owned by
The chairman of the Federal Reserve Board who reduced the inflation rate from over 10 percent to about 3 percent in the early 1980s was
Of the nine directors of each Federal Reserve Bank, ____ are elected by member banks.
When the Fed engages in open-market operations, the transactions are conducted by
A bank in good condition may take out a loan without the Fed questioning the purpose or nature of the loan. Such a loan is known as
If the Open-Market Desk at the Fed buys securities today, the most likely effect is that the
If the Open-Market Desk at the Fed buys securities when the federal funds rate is below the primary credit discount rate, the most likely effect is that the
In November and December, people use more currency than usual, so the Fed increases the money supply through
The actual inflation rate minus the ideal inflation rate is known as
The idea that policymakers may not immediately understand the state of the economy is known as the ____ lag.
The time it takes from when a policy is enacted to when it affects the economy is known as the ____ lag.
The unemployment rate when the economy is producing output equal to its potential is known as?
A money-growth rule that responds to the state of the economy is a type of ____ rule.
Central banks that use inflation targeting usually communicate their goals and plans in a document known as the
The activist terms in the Taylor rule are the.
The Fed tightens policy when it ____ money growth and ____ the federal funds rate.
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