Federal Reserve

Influencing the economy by changing the reserve requirement is called:

• Fiscal policy
• Monetary policy
• Tight Money
• Easy Money

The Federal Reserve System was established in

• 1799
• 1913
• 1863
• 1881

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.

What is Gross Domestic Product (GDP)?

• the primary quantitative measure of economic activity for a nation

• dollar value of all final G/S produced in a country in a 12 month period

• the sum of consumption by households, investment by businesses, government spending, and net exports

• all of these answers are correct

• none of these answers are correct

In addition to monitoring banking & economic conditions, what are some of the functions of the Federal Reserve System?

• banking services for the gov't, issuing currency, raising/lowering taxes

• raising the debt ceiling, setting the discount rate, issuing currency

• setting the discount rate, regulating banks, regulating gov't spending

• banking services for the gov't, buying/selling US bonds, issuing currency

The FED increases/decreases the nation’s money supply in order to meet the 3 main government economic goals. These goals are

• decrease in prices, full employment, reduction in gross domestic product

• stable prices, full employment, economic growths

• consistent prices, regulation of the stock market, reduce gov't spending

• increase in prices, full unemployment, economic growth

The FED's open market operations refers to

• changing the interest rate on loans

• paying member banks interest on the money they hold in reserve

• The buying or selling of bonds

• raising or lowering the discount rate

If the economy is expanding too quickly, the Federal Reserve will institute which type of monetary policy?

• Expansionary
• Contractionary
• Equanimitous
• Whole Dollar

Interest rates are regulated by the Federal Reserve System.

• True

• False

BOG and FOMC's basic tools to conduct monetary policy.

• open market operations

• closed market operations

• discount rate

• reserve requirements