Econ 4-3 Monetary Policy

The amount of money circulating at any given point in time is

• barter
• fiat money
• commodity money
• money supply

Banks bring together...

• savers and spenders

• savers and borrowers

• dealers and druggies

• cheeseburgers and fries

This is a system requiring financial institutions to set aside a fraction of their deposits in the form of reserves or vault cash.

• fractional reserve system
• legal reserves
• reserve requirement
• member bank reserves

Interest rate that the Federal Reserve System charges on loans to the nation's financial institutions.

• discount rate
• prime rate
• monetary rate
• explicit rate

what is the purpose of Monetary Policy?

• contribute to economic growth and stability
• makes Kanye have a better chance to be President
• Functions like Fiscal Policy

Through open market operations, the Federal Reserve buys and sells government securities to influence the supply of bank reserves.  When the Fed wants to increase reserves, it does what?

• Sells Securities
• Buys Securities
• Nothing

Monetary policy refers to what the Federal Reserve does to influence the amount of _____ in the U.S. economy.

• Money Supply

• Gold Reserves

• Interest

• Taxes

The minimum balance of reserves that the Fed requires a bank to keep on hand.

• required reserves

• unit of account

• required reserve ratio

• excess reserves

The central banking system of the United States

• required reserves
• Federal Reserve System
• Federal Market Plan
• fractional reserve banking

The percentage of deposits that the Fed requires a bank to hold on deposit with the Fed or in cash rather than being loaned

• required reserves
• excess reserves
• required reserve ratio
• time deposit