Monetary Policy

What is an action of monetary policy?

• reduce taxes
• changing reserve requirements
• increase spending
• borrow money for deficit

What happens to the money circulation, when the FED orders a tight money policy?

• more money is put out into circulation
• less money is put into circulation
• circulation stays the same
• interest rates rise

The Federal Reserve changing the Reserve Requirement is an example of .....

• Fiscal Policy
• Monetary Policy

The central bank in the USA that regulates the monetary system

• The FED
• FDIC
• The IRS
• Social Security

If the Federal Reserve wanted to stimulate the economy (make it grow), they might

• Sell Treasury bonds
• Buy Treasury bonds
• Spend more money
• Spend less money

Which action increases the money supply?

• the Fed BUYS bonds on the market
• the Fed raises the discount rate
• the federal gov. decreases government spending
• the federal gov. increases personal income taxes

A plan to increase the amount of money in circulation

• open market operations
• expansionary policy
• contractionary policy
• monetarism

The primary role of the Federal Reserve Bank is to steer the economy by

• controlling the budget
• setting spending levels.
• controlling the money supply.
• loaning out money.

Monetary Policy is controlled by

• Congress
• The President
• The Legislative Branch
• The Federal Reserve Bank

The Fed keeps a certain amount of money out of circulation. This is referred to as....

• Reserve requirement
• Emergency Fund
• Stockpile
• Hoard