Monetary Policy and the Federal Reserve

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 consume rs 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

number of federal reserve district banks?

• 5

• 10

• 12

• 21

Raising the discount rate will reduce

• unemployment
• inflation

Lowering the reserve requirement will reduce

• unemployment
• inflation