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8 wer NAME qe Money and Banking Dr. Julie Dahlquist Fall 2007 Final Exam—Version A Clear your desktop of all items except: this exam sheet, your ParScore Scantron, and #2 pencils. Turn off and put away electronic devices, including cell phones, ipods, pagers, calculators, computers, and pdas. THESE TTEMS MAY NOT BE USED DURING THE EXAM. Place your name on this exam paper and on your ParScore Scantron. Bubble in you Banner ID on your Scantron. Bubble in the test form letter under test form. Leave exam number blank. Select the best answer for each of the following questions. You may write on this exam but you must place your final responses on your ParScore Scantron eas op 1. paeoe we d. e. pe oP enor P The Federal Reserve uses the discount rate as its preferred tool to conduct monetary policy uses closed market repurchase agreements as its preferred tool to conduct monetary policy changes the-reserve requirement frequently purchases bonds to increase the money supply —both-e-and-d If the Federal Reserve sells government securities The money supply will increase and interest rates will fall. The money supply will increase and interest rates will rise.- The money supply will decrease and interest rates will fall. <- The money supply will decrease and interest rates will rise. The money supply will increase but interest rates will remain unchanged. Which of the following would cause the SRAS curve to shift to the left? ‘Svers www 4eqeccare every a fall in labor costs a fall in the cost of a major raw material used in the production process an increase in the expected price level (race all of the above. none of the above Which of the following best describes Federal Reserve monetary policy during this semester? The Federal Reserve has tightened the money supply in an attempt to increase the value of the dollar. The Federal Reserve has decreased the fed funds target rate by 75 basis points. Federal Reserve policy has been mainly contractionary in an attempt to counter increasing oil prices. The Federal Reserve has increased the discount rate by 75 basis points to increase bank liquidity in the presence of the subprime mortgage crisis. Federal Reserve policy has focused on decreasing SRAS to counter the damage to the economy done by the suprime mortgage market. The current chairman of the Federal Reserve Board of Governors is Alan Greenspan Milton Friedman Glenn Hubbard Charles Kirkpatrick Ben Bernanke 
