Money and Monetary Policy

"The Fed" refers to the....

• Federal Bureau of Investigation

• Federal Government

• Federal Reserve System/Bank

• Federal Income Tax

If the United States is experiencing inflation, the Fed will likely

• increase the interest on reserve balances

• decrease the interest on reserve balances

In a recession, the Fed would likely

• increase the interest on reserve balances

• decrease the interest on reserve balances

number of federal reserve district banks?

• 5

• 10

• 12

• 21

What happens when the FED implements contractionary monetary policy?

• interest rates rise

• interest rates lower

What action would the Federal Reserve take to control inflation?

• Buy government securities

• Decrease the required reserve ratio

• Increase taxes

• Increase the IORB

Some central banks require that the banks keep a percentage of each deposit. This is referred to as....

• Reserve requirement

• Emergency Fund

• Stockpile

• Hoard

What is NOT a function of money? 

• Medium of Exchange
• Store of Value
• Unit of Account
• Durability 

The Fed's primary tool of monetary policy is...

• interest on reserve balances

• overnight reverse repurchase agreement

• discount rate

• reserve requirement

The Fed's supplementary tool of monetary policy is...

• interest on reserve balances

• overnight reverse repurchase agreement

• discount rate

• reserve requirement