Macroeconomics - Final Review

When the government spends more money than they take in each year is called a _________?

• Debt
• Deficit
• Surplus
• Expansionary

what is the purpose of Monetary Policy?

• contribute to economic growth and stability

• keep rich people from getting too rich

• Functions like Fiscal Policy

• give Congress and the political parties more control of the economy

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.

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

Inflation is measured by...

• Consumer Price Index (CPI).
• Gross National Product (GNP).
• Gross Domestic Product (GDP).
• Securities & Exchange Commission (SEC).

Increasing reserve requirements is used to...

• fight recession.

• stop inflation.

Which of these is NOT a monetary policy tool?

• Discount rate
• Balance Accounts
• Open Market Operation
• Reserved Requirements

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

To much money in our economy leads to 

• Inflation
• Recession

The Board of Governors is appointed by the

• vice president
• president
• Fed
• state governors