derivates

Which of the following is the most frequently used tool the Fed uses to control the supply of money?

• The discount rate.
• The reserve requirements.
• Open market operations.
• The 30-year home-mortgage interest rate.

Which of the following is an appropriate monetary policy if the Fed wants to increase the money supply?

• An increase in the required reserve ratio.
• An increase in the discount rate.
• Purchases of bonds in open market operations.
• Higher taxes on interest income.

What interest rate does a bank pay when it borrows reserves from the Fed?

• The discount rate.
• The prime rate.
• The federal funds rate.
• The required reserve rate.

The Federal Reserve wants to reduce the nation's money supply. This could be accomplished by doing all of the following EXCEPT

• decreasing the discount rate.
• increasing the reserve requirement.
• selling securities on the open market.
• making banks hold a reserve for all types of deposits.

The Federal government is concerned that economic growth is too high, that it is unsustainable, and that inflation is resulting. Which of the following fiscal policies  might be enacted to reduce inflation?

• Increasing taxation
• Open market sales
• decreasing taxation
• Increasing government spending

Which of the following is not a tool of fiscal policy?

• Taxing
• Spending
• Interest Rates
• All of these options are tools of fiscal policy.

An example of expansionary fiscal policy would be

• cutting taxes.
• cutting government spending.
• cutting production of consumer goods.
• cutting prices of consumer goods.

True or False-- the Federal Reserve helps with fiscal policy

• True
• False