Monetary Policy Quiz

Who is in charge of Monetary Policy

• The Government

• The Federal Reserve System

• The states

• The Department of the Treasury

Monetary Policy is the Federal Reserve Systems attempt to...

• promote full employment and maintain price stability through control of the money supply and interest rates

• control the Federal Government's debt

• control state governments' spending

• none of these answers are correct.

Which of these is NOT a monetary policy tool?

• Discount Rate

• Balance Accounts

• Open Market Operations

• Required Reserve Ratio

If the Fed wants to reduce the amount of loans a bank can make, then it should adjust...

• Open Market Operations

• Required Reserve Ratio

• The Discount Rate

If the Fed wants to increase the cost of loans, then it should adjust...

• Open Market Operations

• The Reserve Ratio

• The Discount Rate

An expansionary policy means that the Fed is attempting to

• increase the size of the nation's money supply

• decrease the size of the nation's money supply

A contractionary policy means that the Fed is attempting to

• increase the size of the nation's money supply

• decrease the size of the nation's money supply

Which policy would help fight inflation?

• Expansionary

• Contractionary

Which policy would help fight unemployment?

• Expansionary

• Contractionary

During a recession, the Fed should use...

• an expansionary policy

• a contractionary policy