Exploring Monetary Policy Tools and Money Market Effects

Exploring Monetary Policy Tools and Money Market Effects

Assessment

Interactive Video

Social Studies

6th - 10th Grade

Practice Problem

Easy

Created by

Liam Anderson

Used 1+ times

FREE Resource

The video tutorial covers the basics of monetary policy, focusing on the tools used by the Federal Reserve to manage the economy. It explains the money market graph, expansionary and contractionary monetary policies, and the roles of bonds, discount rates, and reserve ratios. The tutorial also discusses the implications of these policies on interest rates and aggregate demand.

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10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the effect of selling bonds on the economy?

Contracts the economy

Increases money supply

Stimulates spending

Lowers interest rates

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does the Federal Reserve primarily control to influence the economy?

Unemployment rates

Stock market indices

Money supply

Corporate profits

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a bond in the context of monetary policy?

A stock investment

A type of currency

A loan to the government or corporation

A savings account

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What action does the Federal Reserve take to stimulate the economy?

Raise taxes

Buy bonds

Increase interest rates

Sell bonds

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What happens to the money supply when the Federal Reserve buys bonds?

It remains the same

It decreases

It increases

It fluctuates unpredictably

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the primary tool used by the Federal Reserve for monetary policy?

Changing the discount rate

Adjusting the required reserve ratio

Buying and selling bonds

Modifying tax rates

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does the discount rate influence?

The rate at which banks lend to each other

The interest rate for consumer loans

The rate at which banks borrow from the Federal Reserve

The national inflation rate

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