Federal Reserve Interactive Video

What is monetary policy primarily concerned with?

• Regulating international trade

• Allocating resources for education

• Changing the money supply to achieve economic objectives

• Managing the stock market

How do banks contribute to the economy?

• By only accepting deposits

• By linking borrowers with lenders

• By charging high fees

• By limiting loan options

What happens when interest rates are high?

• More people take out loans

• Consumer spending increases

• Business investments rise

• Fewer people take out loans

Who controls the money supply in the United States?

• The President

• The Federal Reserve

• Wall Street investors

• State governments

What is expansionary monetary policy aimed at doing?

• Decreasing the money supply

• Increasing the money supply

• Increasing interest rates

• Reducing government spending

Why does the Federal Reserve use contractionary monetary policy?

• To increase consumer spending

• To boost GDP

• To encourage more loans

• To fight inflation

What did some economists believe about the Federal Reserve's involvement in the economy?

• It is always harmful

• It is necessary to prevent economic calamities

• It should be eliminated completely

• It has no impact on the economy