Chapter 15. The Fed Reverses Course

EIA Activity: The Fed Reverses Course

1. Question

   Use Link 1 to answer the following questions. True or False: The federal funds rate refers to the interest rate charged to depository institutions for overnight loans.

   A.

   False.

   B.

   True.

2. Question

   True or False: Towards the end of 2008, the Federal Reserve decreased the level of long-term securities.

   A.

   False.

   B.

   True.

3. Question

   True or False: Since the end of 2008, the goal of the Federal Reserve has been to support economic activity and job creation.

   A.

   False.

   B.

   True.

4. Question

   True or False: From 2009 through2012, the Federal Reserve kept the federal funds rate between 5% and 6%.

   A.

   False.

   B.

   True.

5. Question

   True or False: The federal funds rate was 1%on October 29, 2008.

   A.

   True.

   B.

   False.

6. Question

   Do you think the Federal Reserve was ever concerned about facing a liquidity trap? Yes or no? Discuss.

   Your response will be graded by your instructor.

   Do you think the Federal Reserve was ever concerned about facing a liquidity trap? Yes or no? Discuss.

7. Question

   Discuss the pros and cons of keeping the federal funds rate near zero percent.

   Your response will be graded by your instructor.

   Discuss the pros and cons of keeping the federal funds rate near zero percent.

• Point per question: 1pts for short answer 1pts for multiple choice
• number of attempts on quiz as a whole: 1 or unlimited?
• set which score reports to Gradebook: first, most recent, highest, or average
• Randomize answers (for multiple choice questions only)? Yes or no