Monetary Policy

Front

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

Back

Fear 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

Fear the economy is growing too rapidly

Front

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

Back

Fear 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

If economy grows too rapidly, what is best option for the Fed consider for stabilizing economy? Options: increase reserve requirement, increase discount rate, sell U.S. Treasury Bonds, all of these

Back

all of these

Front

Which action could the Fed take to reduce the problem of 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

Economy is in a recession. What should Fed do to increase the money $$$ supply? Options: decrease reserve requirement, decrease the discount rate, Open Market Committee buy bonds, all of these

Back

all of these

Front

The Fed buys government securities & lowers discount rate. What is the effect?

Back

economic expansion

Front

The Fed sells government securities and raises the reserve requirement. What is the effect?

Back

economic contraction