Monetary Policy

What does monetary policy refer to?

• the right amount of money flowing in the economy

• guarantees for bank accounts

• the number of people that have a bank account

• • insurance

  
  

What do good monetary policy decisions lead to?

• social progress

  
  

• economic growth

  
  

• job creation

  
  

• • all answers are correct

  
  

How do higher interest rates affect spending?

• more people decide to open bank accounts

• spending decreases as it costs more to borrow money

• spending increases as it costs less to borrow money

• spending stays the same as interest rates don't matter

Monetary policy involves the use of interest rates to control the level and rate of (a)   aggregate demand in the economy

The job of the Central Bank is to ..... the amount of money and credit in the economy

• examine

• investigate

• provide

• control

Tags

CCSS.RI.11-12.4

CCSS.RI.8.4

CCSS.RI.9-10.4

CCSS.RL.11-12.4

CCSS.RL.9-10.4

The rate which the Fed charges banks for a loan______

• Discount rate

  
  

• Prime rate

  
  

• Federal fund rate

  
  

• • Reserve ratio

  • 
    

The Federal Reserve has 3 tools at its.... to conduct Monetary policy: open market operations, the discount rate, and Reserve requirements.

• time

• hand

• disposal

• eyes

Fiscal policy involves setting goverment spending and tax rates, whereas Monetary policy involves money supply and interest rates set by______?

• Shadow Bank

• World Bank

• Central Bank

• • Commercial Bank

If the Central Bank_____reserve requirements,_____the discount bank rate, or buys more bonds, it will increase bank leading capacity.

• ...raises...increases...

  
  

• ...lowers...raises...

  
  

• ...lowers....drops...

  
  

• • ...highers...drops...

  
  

Tags

CCSS.RI.11-12.3

CCSS.RI.11-12.5

CCSS.RI.8.3

CCSS.RI.9-10.3

CCSS.RI.9-10.5

Cash, a house, bonds, and a savings account are financial assets. The assets from the least liquid to the most liquid?

• Cash, bonds, house, savings account

•  Bonds, house, savings account, cash

•  Savings account, cash, bonds, house

• • House, bonds, savings account, cash