Monetary Policy and Money Supply Quiz

What is the definition of money supply?

• The cost of borrowing money

• The amount of money in circulation in an economy at a given time

• The United States central banking system

• The process by which a central bank controls the supply of money

What is the Federal Reserve System?

• The cost of borrowing money

• The amount of money in circulation in an economy at a given time

• The United States central banking system

• The process by which a central bank controls the supply of money

What are interest rates?

• The cost of borrowing money

• The amount of money in circulation in an economy at a given time

• The United States central banking system

• The process by which a central bank controls the supply of money

What is inflation?

• The cost of borrowing money

• The sustained rate at which prices for goods and services rise

• The United States central banking system

• The process by which a central bank controls the supply of money

What is the definition of monetary policy?

• Changes in the money supply that affect the availability and cost of credit

• The amount of money in circulation in an economy at a given time

• The United States central banking system

• The process by which a central bank controls the supply of money

What is expansionary monetary policy?

• When the Fed increases the amount of money in circulation

• When the Fed decreases the amount of money in circulation

• When an economic slowdown is accompanied by inflation

• The cost of borrowing money

What is contractionary monetary policy?

• When the Fed increases the amount of money in circulation

• When the Fed decreases the amount of money in circulation

• When an economic slowdown is accompanied by inflation

• The cost of borrowing money

What is stagflation?

• When the Fed increases the amount of money in circulation

• When the Fed decreases the amount of money in circulation

• When an economic slowdown is accompanied by inflation

• The cost of borrowing money

What is currency?

• The cost of borrowing money

• The amount of money in circulation in an economy at a given time

• the paper and coin part of the money supply

• The process by which a central bank controls the supply of money