Monetary & Fiscal Policy

Monetary policy primarily deals with...

• the unemployment rate.
• the budget.
• the amount of money in circulation.
• the tax rate.

Monetary policy is primarily controlled by...

• Congress.
• the President.
• the House of Representatives.
• the Federal Reserve System (The Fed).

What is something the Federal Reserve System does NOT do?

• Loan money to banks
• Set the reserve rate
• Set the discount rate
• Design currency

The federal requirement to keep a certain percentage of money at the bank is know as the ...

• reserve requirement (rate, ratio).
• discount rate.
• mutual fund.
• prime (interest ) rate.

The interest that the Fed charges banks to borrow money.

• The Reserve Requirement
• The Subprime Rate
• The Discount Rate
• The Counterbalance Ratio

What is based on the amount of money circulating?

• Inflation
• Unemployment
• Reserve Requirement
• Discount Rate

Low interest rates often cause...

• an increase in inflation.
• more unemployment.
• a decrease in inflation.
• less employment.

When the economy is "overheating", the Fed will often...

• decrease discount rates.
• decrease the reserve requirement.
• increase discount rates.
• stay the course.

What deals with taxes and government spending?

• Monetary Policy
• Fiscal Policy
• Trade Policy
• Labor Policy

How does the government NOT raise money?

• Taxes
• Selling Bonds (T Bills)
• Fees & Fines
• Printing more currency