Economics Chapter 11 Quiz

Into how many districts did the Federal Reserve Act divide the nation?

• 10

• 12

• 14

• 8

Who is responsible for guiding the Fed?

• The House of Representatives

• The President of the United States

• The Board of Governors

• The Committee of Chairpersons

Which of the following is not a way in which the Fed is independent of outside control?

• It is politically independent.

• It is financially independent.

• It is operationally independent.

• It is legislatively independent.

To decrease the money supply, what and how would the Fed need to change?

• Increase the discount rate.

• Increase the reserve requirement

• Purchase governmental securities

• Sell governmental securities

What method of changing the money supply does the Fed use most often?

• Open market operations

• Change the discount rate

• Change the reserve rate

• None of the others

What is a tight monetary policy?

• Uses one or more of its tools to increase the money supply.

• Uses one or more of its tools to stagnate the money supply.

• Uses one or more of its tools to reduce the money supply.

What concerns cause the Fed to implement a loose monetary policy?

• High inflation

• High deflation

• Possible recession

• Rising unemployment