Money & the Federal Reserve

The Federal Reserve System is called the _________ for short.

• FED

• GDP

• IRS

The Federal Reserve

• is made up of 12 district banks.

• is managed by a 10-member board of directors.

• is made up of district banks that operate independently from one another.

What does the Federal Reserve help regulate?

Check all that apply.

• Inflation

• The supply of Chocolate

• Unemployment

Fee charged to borrow money

• Inflation
• Interest
• Discount rate
• Reserve requirement

The (a)   the interest rate, the cheaper the loan.

The (a)   the interest rate, the more expensive the loan.

Which monetary policy increases the money supply and makes it easier for banks to loan out money?

• Expansionary

• Contractionary

Which monetary policy decreases the money supply, causing consumer spending and investment to decrease?

• Expansionary

• Contractionary

What is the definition of monetary policy?

• the ability to influence the availability of money in the economy.

• a government adjusts its tax rates to monitor and influence a nation's economy.

• meeting the needs of the present without compromising the ability of future generations to meet their needs.

The primary role of the Federal Reserve Bank is to steer the economy by

• controlling the budget
• setting spending levels.
• controlling the money supply.
• loaning out money.