The Business Cycle

Front

A major purpose of the Federal Reserve System is to

Back

regulate interest rates and the money supply

Front

In times of economic recession, the Federal Reserve Board often tries to encourage economic growth by

Back

lowering interest rates

Front

In times of economic expansion, the Federal Reserve Board often tries to slow inflation by

Back

raising interest rates

Front

The Federal Reserve System's role in controlling inflation is to...

Back

decrease the money supply

Front

One of the key functions of the Federal Reserve System is to...

Back

regulate interest rates and the money supply

Front

During an economic boom, what action might the Federal Reserve Board take to prevent inflation?

Back

Raising interest rates

Front

What is the primary tool used by the Federal Reserve Board to control inflation?

Back

Interest rates

Front

During an economic recession, the Federal Reserve Board often tries to stimulate growth by lowering interest rates.

Back

lowering interest rates

Front

How do banks use deposits?

Back

to make loans

Front

What is the MOST LIKELY result of high unemployment? Options: an increase in consumer spending, an increase in sales tax, a decrease in consumer spending, a decrease in the need for social services

Back

a decrease in consumer spending