money, the FED, and policy

Interest rate that the Federal Reserve System charges on loans to the nation's financial institutions.

• discount rate

• monetary rate

• explicit rate

If the Federal Reserve wanted to stimulate the economy (make it grow), they might

• Sell Treasury bonds

• Buy Treasury bonds

• Spend less money

What action would the Federal Reserve take to control inflation?

• Decrease the required reserve ratio

• Increase taxes

• Increase the discount rate

Each of the following are examples of M1 Money, EXCEPT...

• Money from a Certificate of Deposit

• Cash from your wallet

• Checks from your check book

_________ is a medium of exchange whose value derives entirely from its official status of a means of payment.

• Fiat Money

• Commodity Money

• Aggregate Money

To increase aggregate demand, the Fed could

• increase the money supply.

• conduct open-market sales.

• decrease the money supply

A reserve ratio is the:

• fraction of deposits that the bank is required to hold.
• money belonging to the bank's largest depositors.

The Federal Reserve System was created in:

• 1913.
• 1857.
• 1873.

The primary role of the Federal Reserve Bank is to steer the economy by

• controlling the budget
• setting spending levels.
• controlling the money supply.

thousands of years ago people used _______ intead of money

• barter

• credit cards