Test Yourself

Answer the following multiple-choice questions:

1. The Federal Reserve has a dual mandate to:

a. print money by a pace of 5 percent per year.

b. foster price stability and promote full-employment.

c. cut interest rates to zero.

d. help maintain a strong value of the dollar.

e. none of the above.

2. The Federal Reserve's Consumer Credit report does not include:

a. credit cards.

b. mortgages.

c. auto loans.

d. student loans.

e. none of the above.

3. The Federal Reserve’s Senior Loan Officer Opinion Survey:

a. tells economists why the Fed is raising rates.

b. provides insight regarding the latest monetary policy moves.

c. provides insight regarding new Fed regulations on community reinvestment policies.

d. provides insight regarding lending standards and demand for loans.

e. none of the above.

4. The Federal Reserve Bank of Philadelphia’s Aruoba-Diebold-Scotti (A-D-S) Business Conditions Index:

a. projects the trends of underlying economic activity on a real-time basis.

b. estimates the growth rate of real GDP six months in the future.

c. projects manufacturing activity three to six months in the future.

d. all of the above.

e. b and c only.

5. The Dallas Fed Trimmed Mean PCE inflation rate index:

a. Trims the CPI from the Personal Consumption Expenditure Deflator (PCED).

b. Trims wages and salaries from the Personal Consumption Expenditure Deflator (PCED).

c. Trims the most volatile components from the Personal Consumption Expenditure Deflator (PCED).

d. All of the above.

Answers