Fiscal & Monetary Policy Test (Ch 15/16)

a rise in the cost of goods and services

• inflation
• discount rate
• interest
• monetary policy

Fee charged by the Federal Reserve Bank for other member banks to borrow money from the FED through the discount window?

• inflation

• interest

• discount rate

• reserve requirement

The goal of monetary policy is to

• sell bonds

• reduce unemployment

• prevent inflationary and recessionary economic periods

• increase tariffs on foreign countries

"The Fed" refers to the....

• Federal Bureau of Investigation

• Federal Government

• Federal Reserve System/Bank

• Federal Income Tax

The federal government is attempting to encourage spending by consumers and businesses, a fiscal policy BEST serving this purpose would be

• decreasing taxes

• decreasing government spending

• reducing the investment tax credit

• balancing the budget

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

In a recession, the Fed would likely

• Increase the supply of money in the economy
• Decrease the supply of the money in the economy

Does increasing the money supply cause inflation or deflation?

• Inflation
• Deflation

The number of federal reserve district banks

• 5

• 10

• 12

• 21

Money loses its value when it

• It becomes too plentiful

• becomes too portable

• is divisible

• is durable