Question : 11) The core inflation rate measures changes in the A) price : 1240666

11) The core inflation rate measures changes in the

A) price of only two consumer goods: food and fuel.

B) prices of all consumer goods.

C) prices of consumer goods except food and fuel.

D) prices of consumer goods except health care.

E) prices of all the “core” goods and services a typical family buys.

12) To determine whether the goal of stable prices is being achieved, the Federal Reserve monitors the ________; to determine whether the goal of maximum employment is being achieved, the Federal Reserve monitors ________.

A) core CPI inflation rate; the natural unemployment rate

B) CPI; the gap between nominal GDP and real GDP

C) core GDP deflator inflation rate; the natural unemployment rate

D) core PCE deflator inflation rate; the output gap

E) GDP price deflator; real GDP

13) Control of monetary policy rests with

A) Congress.

B) the President.

C) the Federal Reserve.

D) the Comptroller of the Currency.

E) the U.S. Treasury.

14) In the United States,

A) Congress must approve monetary policy changes.

B) Congress initializes changes in monetary policy and the Fed approves the changes.

C) the Federal Reserve sets monetary policy.

D) the Federal Reserve sets monetary and fiscal policies.

E) the President initializes changes in monetary policy and the Fed approves the changes.

15) Which of the following statements are correct?

i.The Federal Reserve’s monetary policy must be approved by the President of the United States .

ii.The Federal Reserve Board of Directors meets approximately every six months to review the state of the economy and determine monetary policy.

iii.The Federal Reserve has determined it will use the monetary base as its policy instrument.

A) i and ii

B) ii only

C) i only

D) iii only

E) None of the above answers is correct.

16) Which of the following statements are correct?

i.Congress does not play a role in making monetary policy decisions.

ii.The FOMC meets eight times a year to make monetary policy decisions.

iii.The President of the United States appoints members of the Board of Governors and the Chairman of the Board of Governors, but the President has little other formal authority over monetary policy.

A) i, ii, and iii

B) i,and ii

C) ii only

D) i and iii

E) ii and iii

17) Monetary policy decisions are made by the

A) Federal Reserve Economic Committee.

B) Federal Open Market Committee.

C) Council of Economic Advisors.

D) Congress of the United States.

E) U.S. Mint.

18) The FOMC is the

A) report the Fed gives to Congress twice a year.

B) group within the Fed that makes monetary policy.

C) report that summarizes the economy across Fed districts.

D) name of the meeting the Fed has with Congress twice a year.

E) interest rate the Fed most directly influences.

19) The federal funds rate is

A) the interest rate banks charge each other on overnight loans.

B) the interest rate on the 3-month Treasury bill.

C) another name for the real interest rate.

D) the interest rate on the 30-year treasury bond.

E) also known as the prime rate.

20) Which of the following is a potential monetary policy instrument for the Fed?

A) federal funds rate

B) loanable funds

C) inflation rate

D) real interest rate

E) profit rates