Unit #3 Standard #2

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

Does increasing the money supply cause inflation or deflation?

• Inflation

• Deflation

Lowering the reserve requirement will reduce

• unemployment

• inflation

The Federal Reserve uses ______ to regulate the economy.

• Monetary Policy

• Fiscal Policy

The interest rate the Fed charges commercial banks for loans

• Fed Fund Rate

• Reserve Requirement Rate

• Discount Rate

• I.O.U Rate

Percentage of deposits that the Fed requires banks to hold back and not lend out

• Fed Fund Rate

• Reserve Requirement Rate

• Discount Rate

• I.O.U Rate

If we are experiencing a severe recession, the fed should _____ the reserve requirement.

• increase

• decrease

Which of the following is expansionary policy?

• selling bonds

• increase fed fund rate

• decrease discount rate

• increase required reserves

the price paid for the use of borrowed money

• monthly payment

• exchange rate

• interest

• opportunity cost