Monetary Policy

When the government spends more money than they take in each year is called a _________?

• Debt
• Deficit
• Surplus
• Expansionary

"The Fed" refers to the....

• Federal Bureau of Investigation
• Federal Government
• Federal Reserve System
• Federal Income Tax

what is the purpose of Monetary Policy?

• contribute to economic growth and stability

• keep rich people from getting too rich

• Functions like Fiscal Policy

• give Congress and the political parties more control of the economy

These are IOUs from the U.S. government to people that finance a little piece of the government's debt in exchange for a very small amount of interest

• Government Bonds, or Securities

• Government Credit

• Government Cash

• Government Holdings

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.

Cash that banks must keep in the vault.

• excess reserves
• fiscal policy
• required reserves
• crowding out effect

Which of the following would the FED use to increase the money supply?

• raise the discount rate
• raise the required reserves
• buy bonds/securities
• print more money

If the Federal Reserve wanted to stimulate the economy (make it grow), they might

• Sell Treasury bonds
• Buy Treasury bonds
• Spend more money
• Spend less money

Which of the following scenarios would cause the nation’s money supply to increase?

• Decreasing government spending
• Lowering interest rates
• Raising interest rates
• Selling bonds to investors

Which of these is NOT a monetary policy tool?

• Discount rate
• Balance Accounts
• Open Market Operation
• Reserved Requirements