Monetary Policy

Monetary Policy

12th Grade

20 Qs

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Monetary Policy

Monetary Policy

Assessment

Quiz

Social Studies

12th Grade

Medium

Created by

Jaclyn Nemes

Used 15+ times

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20 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Assume reserve requirement is 10%; Mrs. Nemes deposits $1 million in cash into her checking account. The deposit will initially increase excess reserves by

$100,000

$900,000

$1 million

$9 million

2.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

If the required reserve ratio is .2, a $1 billion increase in bank reserves can lead to an increase in M1 of at most

$6 billion

$5 billion

$1 billion

$0.2 billion

3.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The federal funds rate is

the interest rate that banks charge governments

the interest rate on personal loans

the interest rate banks pay the Fed

the interest rate that banks charge other banks for overnight loans

4.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following is a monetary policy that can be used to counteract a recession

buying bonds in the open market

increasing the discount rate

increasing the required reserve ratio

lowering tax rates

5.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following is a monetary policy tool that would fight inflation

buying bonds in the open market

decrease spending

increase income taxes

increase the required reserve ratio

6.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The demand curve for money shifts to the right when

the nominal interest rate decreases

the nominal GDP increases

the real GDP decreases

inflation decreases

the velocity of money increases

7.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

In the short run, a tight monetary policy tends to cause

a decrease in the interest rate and a decrease in prices

a decrease in the interest rate and an increase in private investment

a decrease in prices and an increase in private investment

an increase in the interest rate and an increase in private investment

an increase in the interest rate and a decrease in private investment

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