Unit 5 Money/Federal Reserve/Monetary Policy

Front

Institution that regulates and oversees the nation's banks and is considered the Central Bank of the United States

Back

Federal Reserve

Front

Which of the following is NOT a function of the Federal Reserve? provide financial services to member banks, regulate and ensure a stable banking system, conduct monetary policy, taxation and revenue collection

Back

taxation and revenue collection

Front

Part of the Federal Reserve that sets monetary policy?

Back

Federal Open Market Committee

Front

The Board of Governors are voting members of the Federal Open Market Committee and conduct monetary policy

Back

True

Front

Controlling of the money supply by the Federal Reserve to influence the cost and availability of credit

Back

monetary policy

Front

Policy that allows the money supply to grow which causes interest rates to fall. Used to help stimulate the economy during slow economic times

Back

expansionary monetary policy (AKA loose money and easy money)

Front

Policy that decreases the money supply which causes interest rates to rise. Used to slow down inflation and keep prices stable.

Back

contractionary monetary policy (AKA tight money and restrictive monetary policy)

Front

most commonly used tool by the Federal Reserve which is the buying and selling of government securities (bonds)

Back

open market operations

Front

Which of the following scenarios would increase the money supply?
The Federal Reserve sells bonds on the open market
The Federal Reserve buys bonds on the open market
increasing the discount rate
increasing the reserve requirement

Back

The Federal Reserve buys bonds on the open market

Front

Which of the following scenarios would decrease the money supply? Options: decreasing the discount rate, decreasing the reserve requirement, increasing the discount rate, buying government securities on the open market

Back

increasing the discount rate