3 Tools of the Feds to Control Economy

Influencing the economy by changing the reserve requirement is called:

• Fiscal policy
• Monetary policy
• Tight Money
• Easy Money

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 lead to 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.

After being in a recession for a long time, the Fed would likely

• Increase the supply of money in the economy

• Decrease the supply of the money in the economy

If the economy is expanding too quickly, the Federal Reserve will institute which type of monetary policy?

• Expansionary
• Contractionary
• Equanimitous
• Whole Dollar

What does Inflation do to the value of money?

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

Increasing the reserve requirement has which of the following results:

• More is lent out and more is paid in interest
• More is lent out and less is paid back in interest
• Less is lent out and more is paid in interest
• Less is lent out and less is lent in interest.

The money kept out of circulation by the Fed is referred to as....

• Reserve requirement

• Emergency Fund

• Stockpile

• Hoard

Raising the discount rate will reduce

• unemployment
• inflation