Monetary Policy

What are the Fed's 2 Mandates

• Stable prices

• Full employment

• Low interest rates

• To maximize profit

The Fed buys bonds...

• Contractionary

• Expansionary

Answer explanation

By buying bonds, the Fed is introducing more currency into the money supply

The Fed decreases the reserve requirement

• Expansionary

• Contractionary

The Fed is divided into ___ regions/districts

• 12

• 99

• 10

• 50

The name for when the fed buys or sells treasury bonds

• Open market operations

• the bond market

• the money market

Who is in charge of Monetary Policy

• The Government

• The Federal Reserve System

• The states

• The Department of the Treasury

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.

Which of these is NOT a monetary policy tool?

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

If the Fed wants to reduce the amount of loans a bank can make, then it should adjust...

• Open Market Operations

• The Reserve Ratio

• The Discount Rate

If the Fed wants to increase the cost of loans, then it should adjust...

• Open Market Operations

• The Reserve Ratio

• The Discount Rate