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Published byMerryl Clark Modified over 9 years ago
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Are you smarter than a Fed Chairman?
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What are the 2 main components of M1? Cash Checking Accounts (Demand Deposits)
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You deposit a $100 bill into your checking account. What immediate effect would this have on the Money Supply? No effect
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You deposit $10,000 in a checking account when the Reserve Requirement is 20%. How much must your bank place in reserves? $2,000
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TIME Magazine said I was.... What? The most powerful nerd on the planet!
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The Reserve Requirement is 10%. What is the money multiplier? 10
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The Reserve Requirement is 20%. You deposit $10,000 in your bank checking account. By how much might the money supply increase? $40,000
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The supply of money increases while demand remains unchanged. What would happen to interest rates? Fall (decrease)
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True or False: Since my high school did not offer Calculus, I learned it on my own. True
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The Fed lowers the Reserve Requirement. What would this do to the Money Supply? Increase
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The economy is in a recession. Should the Fed implement a contractionary policy or expansionary policy? Expansionary
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The Fed wants to implement a contractionary policy. Should it increase or decrease interest rates? Increase
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What did I score on the SAT? (back in the days when it only had 2 sections, not 3) 1590 out of 1600
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Banks that borrow from the Fed pay what rate of interest? Discount Rate
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Who is in charge of Open Market Operations? FOMC Federal Open Market Committee
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If the FOMC wants to increase the Money Supply, what would it do? Buy government securities
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Where did I earn my Ph.D? M.I.T. It’s no Stanford, but it was the best I could do.
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If the FOMC sells government securities, what would happen to the federal funds rate? Increase
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The money people save that is available to be borrowed is known as the _______ _________ market. Loanable Funds
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If the government increases its borrowing, what would probably happen to the level of interest rates? Increase
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At which university was I chairman of the Economics Department? Princeton
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If people’s savings decline, what would probably happen to the level of interest rates? Increase
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What would a decrease in interest rates do to the overall level of investment in the economy? Make it increase
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What would an increase in investment do to the economic growth rate of the economy? Make it increase
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