Monetary Policy Practice

1.

1 point

Banks create money by giving out _______________.

2.

1 point

The Fed is short for

Federal Reserve

Federal Reserve System

Federal System

Reserve System

3.

1 point

Which of the three macroeconomics goals is the Fed's primary focus

Economic Growth

Low Unemployment

Price Stability

4.

1 point

What is the discount rate?

interest charged on loans from the Fed to the member banks

interest charged on loans give from bank to bank

percentage of every deposit that banks must keep

buying and selling of government securities

5.

1 point

What is the reserve requirement?

buying and selling of government securities

interest charged on loans from the Fed to the member banks

interest charged on loans give from bank to bank

percentage of every deposit that banks must keep

6.

1 point

What is open market operations?

interest charged on loans give from bank to bank

interest charged on loans from the Fed to the member banks

buying and selling of government securities

percentage of every deposit that banks must keep

7.

1 point

What is the federal funds rate?

buying and selling of government securities

percentage of every deposit that banks must keep

interest charged on loans give from bank to bank

interest charged on loans from the Fed to the member banks

8.

1 point

If the Fed wants to increase the money supply they should take actions to __________________ interest rates

9.

1 point

If the Fed wants to decrease the money supply, they should

sell government securities

decrease the reserve requirement

decrease the discount rate

10.

1 point

If the Fed wants to increase the money supply, they should

decrease the discount rate

increase reserve requirements

sell open market operations

11.

1 point

When the Fed is trying to increase the money supply, they follow _____________ money policy.

12.

1 point

When the Fed is trying to decrease the money supply, they follow _____________ money policy.

13.

1 point

The Fed should follow tight money policy during what period of the business cycle?

14.

1 point

The Fed should follow loose money policy during what period of the business cycle?

15.

1 point

Which of the following is not a function of the Fed?

making coins

being the banker's bank

supervising banks

conducting monetary policy

16.

1 point

What is the number of federal reserve districts?

8

14

12

10

17.

1 point

Tight money policy could cause

Inflation

Recession

18.

1 point

Loose money policy could cause

Recession

Inflation