Money and the Fed

A Medium of exchange, measure of value, and a store of Value are called what?

• Functions of money

• Your pay check

• Characteristics of money

• Types of money

What is one way the Fed can counter (lower) unemployment and stimulate spending

• Sell securities

• Use tight monetary policy

• Decrease the discount rate

• Raise the discount rate

What may happen when interest rates are lowered?

• Less capital for loans are available

• Prices may inflate

• Unemployment may increase

• Taxes decrease

What are interest rates?

• The unemployment rate

• How much the banks keep on hold

• The cost of borrowing money

• When prices rises

This is a paper component of the money supply, today consisting of Federal Reserve notes.

• coins
• currency
• both coins and currency
• debit cards

Monetary policy resulting in lower interest rates and greater access to credit; associated with an expansion of the money supply.

• tight money policy
• open market policy
• easy money policy
• excess reserve policy

Monetary policy resulting in higher interest rates and restricted access to credit; associated with a contraction of the money supply.

• easy money policy
• tight money policy
• open market policy
• interest rate policy

Interest rate that the Federal Reserve System charges on loans to the nation's financial institutions.

• discount rate
• prime rate
• monetary rate
• explicit rate

How many Federal Reserves are there in the US?

• 25
• 50 
• 12
• 15

True or False? A sales tax is applied at the state level and not federal level.

• True

• False