Monetary Policy

Front

The "FED" announces it will lower discount rates to banks. Why would the Fed take this action?

Back

the economy is falling into a recession

Front

The "Fed" issues an order to raise the reserve requirement on banks. What reason for this action?

Back

the economy is growing too rapidly

Front

The "Fed's" Open Market Committee sells millions of bonds to private brokers. Reason for action?

Back

the economy is growing too rapidly

Front

A major function of the "Fed" is to:

Back

manage the supply of currency and bank credit

Front

Which of these is NOT an option for the "Fed" to consider when deciding monetary policy?
Options: raise or lower reserve requirement, raise or lower discount rate, buy or sell U.S. Treasury Bonds, Taxing both individuals and business corporations alike

Back

Taxing both individuals and business corporations alike

Front

Which action could the "Fed" take to reverse a recession? Options: cutting money spent on social programs, lowering discount rate, raising tariffs on foreign imports, reduce government spending, all of these

Back

lowering discount rate

Front

The "Fed" buys government bonds(securities) & lowers discount rate. What is the direct effect?

Back

economic expansion

Front

The "Fed" sells government bonds(securities) and raises the reserve requirement. What is the effect?

Back

economic contraction

Front

People buy more houses. What change in the discount rate would cause this?

Back

decrease

Front

People pay more for loans. What change in the discount rate would cause this?

Back

increase