Fiscal and Monetary Policy

The _ creates monetary policy.

• Federal Reserve Bank

• Congress

• Donald Trump

• Hogwarts

Who has the power to create fiscal policy?

• the Federal Reserve Bank

• the Governor of Texas

• the President of the USA

• Congress

What is the EFFECT of increasing the money supply?

• inflation increases and the economy is stimulated

• inflation decreases and the economy is stimulated

• the economy contracts and unemployment decreases

• the economy contracts and inflation increases

When the economy is in recession, the Fed and Congress should pass _.

• expansionary policies

• contractionary policies

• do nothing

Which of the following is NOT a characteristic of an economy in a recession?

• high unemployment

• low unemployment

• low inflation

• Federal Reserve Bank

• Congress

• Functions of Money

• Types of Monetary and Fiscal Policy

• Stock Exchange

• Federal Reserve System

• Treasury Department

• Washington, D.C.

One way the Federal Reserve can counter unemployment and stimulate spending is by —

• selling securities

• decreasing the discount rate

• tightening monetary policies

• increasing the reserve requirement

In order to require banks to hold more money as opposed to lending it, the Federal Reserve can —

• decrease the discount rate

• decrease the federal funds rate

• increase the reserve requirement

• suspend the federal funds rate target

Which of the following is an action of the Federal Reserve that strongly influences local economies?

• It can raise or lower property taxes.

• It can provide stimulus money for job creation.

• It can require banks to provide savings accounts to the community.

• It can make loans cheaper or more expensive by adjusting interest rates.