3.5 Monetary Policy Intro

Multiple Choice

Monetary policy is carried out by...

• Governments

• Central banks

• Firms

• Households

Multiple Choice

Monetary policy is about influencing...

• Short-run aggregate supply

• Long-run aggregate supply

• Aggregate demand

Multiple Choice

The Federal Reserve targets a low and stable rate of inflation at...

• 0%

• 1%

• 2%

• 3%

Multiple Select

Monetary policy involves... (check all that apply)

• Changing interest rates

• Changing money supply

• Changing income taxes

• Changing levels of government expenditure

Multiple Select

The goals of monetary policy include... (check all that apply)

• Maintaining business cycle fluctuations

• Low unemployment

• External balance

• Promote stable environment for long-term growth

Multiple Choice

The actual interest rate that is agreed between the bank and the customer is the...

• Nominal interest rate

• Real interest rate

Multiple Select

If a government wants to decrease inflation in an economy, it can... (check all that apply)

• Reduce interest rates

• Interest interest rates

• Reduce money supply

• Increase money supply