Monetary Policy revision

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

• Debt
• Deficit
• Surplus
• Expansionary

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

• control the amount of money in circulation

• control the Federal Government's debt

• control state governments' spending

• none of these answers are correct.

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

During a recession, the Fed should use...

• an expansionary policy

• a contractionary policy

Selling bonds

• increases money supply
• decreases money supply

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

The Fed keeps a certain amount of money out of circulation. This is referred to as....

• Reserve requirement
• Emergency Fund
• Stockpile
• Hoard

Quantitative Easing: Increasing the money supply and using these electronically created funds to buy government bonds or other securities.

• Done by Central Bank

• Done by commercial Bank

• Done by Investment bank

• None of the above