ECON FINAL PT 3

Bob and Rob are interested in buying a house together. They have been following the interest rate changes of the Fed in recent months. They learned that in order to control the money supply they decreased the interest rates. Who would this situation benefit the most

• Borrowers

• Lenders

• Neither will benefit

• Both will benefit

Carina and Maya are interested in buying a house together. They have been following the interest rate changes of the Fed in recent months. They learned that in order to control the money supply they increased the interest rates. Who would this situation benefit the most

• Both will benefit

• Lenders

• Neither will benefit

• Borrowers

Where is the Federal Reserve Bank for residents of the lower peninsula of Michigan located

• Chicago

• Detroit

• Lansing

• Washington D.C

Zariah has $3,500 in her savings account. The Federal Reserve increases the money supply shortly after. What happens to her purchasing power

• She donates all of the money to charity

• It increases

• It decreases

• Nothing

Why might the Fed lower interest rates

• To get the country to full employment

• To test real world, econometric models

• To stimulate the economy

• To combat inflation

Why might the Fed raise interest rates

• To test real world, econometric models

• To get the country to full employment

• To combat inflation

• To stimulate the economy

Which of the following is not one of the goals of monetary policy

• Sustainable economic growth

• Stable prices

• Low interest rates for banks

• Full employment

What is the overall purpose of the Federal Reserve

• To protect people's deposits

• To ensure a stable economy for the nation

• To limit the nation's unemployment

• To loan out money to smaller bank

The Fd Board of Governors is made up of

• 4 members on 4 year staggered terms

• 8 members on 4 year staggered terms

• 12 member on 14 year staggered term

• 7 members on 14 year staggered term

What is the effect of low interest rates on consumers and lenders?

• Consumers save more money, lenders earn less money

• Consumers save more money, lenders earn more money

• Consumers save less money, lenders earn more money

• Consumers save less money, lenders earn less money