The Federal Reserve Bank

Which is a goal of the Federal Reserve's monetary policy?

• Create a high level of inflation

• Create price stability in the economy

• Print currency for American citizens

• Develop fiscal policy for the United States

If the Fed wanted increase economic activity (ease monetary policy), which might they do?

• Increase reserves, limiting what banks can loan

• Increase the interest rate

• Decrease the interest rate

• Lower taxes

Fee charged to borrow money

• Inflation
• Interest
• Discount rate
• Reserve requirement

What does Inflation do to the value of money?

• Makes it go up.
• Makes it go down.
• Makes it stay the same.

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.

In a recession, the Fed would likely

• Increase the supply of money in the economy
• Decrease the supply of the money in the economy

If the United States is experiencing inflation, the Fed will likely

• Increase the supply of money in the economy
• Decrease the supply of money in the economy

If the economy is expanding too quickly, the Federal Reserve will try to stabilize the economy by doing what?

• increasing money supply

• decreasing money supply

• decreasing interest rates

• lowering the discount rate

Which of the following are TWO ways the Federal Reserve achieves it's goals?

• Promote economic growth through managing the money supply

• Promote higher education by keeping college loan interest rates low

• Keep inflation at a low and steady rate

• Develop strict barriers to entry into the banking system

How is the Chair of the Federal Reserve selected?

• Voted on by American public

• Appointed by POTUS and approved by the Senate

• Appointed by the president of the World Bank

• Chosen by the Senate Majority Leader