Illustrate multiple choice problems about real business cycle, labor supply, real interest rate, monetary base.

1. In a real business cycle model, labor supply:

a) increases if the nominal interest rate rises.

b) is independent of the real interest rate.

c) decreases if the real interest rate rises.

d) decreases if the real interest rate falls.

2. Which of the among is one of the Fed's policy goals?

a) Help the President win reelection

b) Exchange rate

c) Monetary base

d) Price level stability

3. The majority of money is created when:

a) banks make loans.

b) new coins are minted.

c) new bills are printed.

d) the Fed sells bonds.