Federal Reserve review

What is one way the Federal Reserve System regulates economic activity?

• Regulating tariff rates on foreign imports
• Regulate production on consumer goods
• Regulating the amount of money in circulation 
• Regulating spending by the federal government

Why might lawmakers increase taxes and decrease government spending?

• to reduce unemployment

• to increase consumer spending

• to decrease the level of demand

• to encourage corporate spending

The Federal Reserve was founded in response to

• The Great Depression in the 1930s

• The Great Recession from 2007-2009

• Bank failures and panics around the beginning of the 20th century

• The end of World War Two to help the global economy recover

If the Fed wanted to expand or ease monetary policy, which might they do?

• Increase reserves, limiting what banks can loan

• Increase the interest rate

• Decrease the interest rate

• Lower taxes

If the Fed wanted to contract or tighten the economy to help fight inflation, they might

• Increase reserves to limit what banks can loan out

• Lower the interest rate

• Decrease reserves allowing banks to loan more

• Decrease government spending

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.

Does increasing the money supply cause inflation or deflation?

• Inflation
• Deflation

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