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- 1. Multiple Choice
Who is in charge of Monetary Policy
The Government
The Federal Reserve System
The states
The Department of the Treasury
- 2. Multiple Choice
Monetary Policy is the Federal Reserve Systems attempt to...
control the amount of money in circulation
control the Federal Government's debt
control state governments' spending
none of these answers are correct.
- 3. Multiple ChoiceWhich of these is NOT a monetary policy tool?Discount rateBalance AccountsOpen Market OperationReserved Requirements
- 4. Multiple Choice
If the Fed wants to reduce the amount of loans a bank can make, then it should adjust...
Open Market Operations
The Reserve Ratio
The Discount Rate
- 5. Multiple Choice
If the Fed wants to increase the cost of loans, then it should adjust...
Open Market Operations
The Reserve Ratio
The Discount Rate
- 6. Multiple Choice
An expansionary policy means that the Fed is attempting to
increase the size of the nation's money supply
decrease the size of the nation's money supply
- 7. Multiple Choice
A contractionary policy means that the Fed is attempting to
increase the size of the nation's money supply
decrease the size of the nation's money supply
- 8. Multiple Choice
Which policy would help fight inflation?
Expansionary
Contractionary
- 9. Multiple Choice
Which policy would help fight unemployment?
Expansionary
Contractionary
- 10. Multiple Choice
During a recession, the Fed should use...
an expansionary policy
a contractionary policy
- 11. Multiple Choice
During an expansion, the Fed should use...
an expansionary policy
a contractionary policy
- 12. Multiple ChoiceSelling bondsincreases money supplydecreases money supply
- 13. Multiple ChoiceBuying bondsincreases money supplydecreases money supply
- 14. Multiple ChoiceIf the Federal Reserve wanted to stimulate the economy (make it grow), they mightSell Treasury bondsBuy Treasury bondsSpend more moneySpend less money
- 15. Multiple ChoiceWhich of the following scenarios would cause the nation’s money supply to increase?Decreasing government spendingLowering interest ratesRaising interest ratesSelling bonds to investors
- 16. Multiple ChoiceWhat action would the Federal Reserve take to control inflation?Buy government securitiesDecrease the required reserve ratioIncrease taxesIncrease the discount rate
- 17. Multiple ChoiceThe Fed keeps a certain amount of money out of circulation. This is referred to as....Reserve requirementEmergency FundStockpileHoard
- 18. Multiple ChoiceDuring a contraction what would you do to stimulate the economy?Lower the RRR, Lower the DR, Buy BondsRaise the RRR, Raise the DR, Sell Bonds
- 19. Multiple ChoiceDuring an expansion what would you do to prevent inflation?Lower the RRR, Lower the DR, Buy BondsRaise the RRR, Raise the DR, Sell Bonds
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