Monetary / Fiscal Policy

Buying bonds (Easy Money) (Big Bucks)

• increases money supply

• decreases money supply

High reserve requirements 

• lower the money supply
• increase the money supply

"The Fed" refers to the....

• Federal Bureau of Investigation
• Federal Government
• Federal Reserve System
• Federal Income Tax

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

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 of the following scenarios would cause the nation’s money supply to increase?

• Decreasing government spending
• Lowering interest rates
• Raising interest rates
• Selling bonds to investors

Lowering interest rates to stimulate the economy is called:

• Fiscal policy
• Monetary policy
• Easy Money
• Tight Money

During a recession what would you do to stimulate the economy?

• Lower the RRR, Lower the DR, Buy Bonds

• Raise the RRR, Raise the DR, Sell Bonds

There are _______ Regional Federal Reserve Banks, and one Federal Reserve Board of Governors.

• 50
• 4
• 12
• 52