Monetary Policy

What are the two types of Monetary Policy?

• Active and Passive
• Easy and Tight Money Policy

• Fiscal and Monetary

• Discount and Inflation

Reserve Requirements are what?

• Reserve requirements are the percentages of each deposit that the bank holds

• Reserve requirements are the interest rates set by the central bank

• Reserve requirements are what a bank can lend out

• Reserve requirements are the fees charged to have a bank account

Which of the following is an example of Easy Money Policy?

• The Fed increases the margin requirement

• The Fed increases the reserve requirement

• The Fed sells government securities

• The Fed decreases the discount rate

In the Fractional Reserve System, _____ are required to keep a fraction of their deposits in the form of legal reserves.

A policy that seeks to increase the money supply and lower interest rates to encourage economic activity is an ____ Money Policy

Monetary policy primarily deals with...

• Amount of money in circulation

• the budget

• Unemployment Rate

• the tax rate

In this Scenario...... If the Fed is buying more securities, is it a Tight Money Policy or Easy Money Policy?

• Easy Money Policy

• Tight Money Policy

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

• Sell bonds

• Buy bonds

• Spend more money
• Spend less money

How long of a term do each of the board of governors of the FED serve for?

• 4 years

• 6 years

• 14 years

• 2 years

All of the following are the main goals of The Fed except......

• Price Stability

• Full Employment

• Economic Growth

• Monitor Trade