Understanding the Federal Reserve and Interest Rates
Interactive Video
•
Business
•
9th - 10th Grade
•
Practice Problem
•
Hard
Jennifer Brown
FREE Resource
5 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary role of the Federal Reserve in the United States?
To regulate international trade
To directly influence the economy for the country's greater good
To manage the country's fiscal policy
To control the stock market
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How can a change in interest rates affect the stock market?
It stabilizes the stock market
It only affects long-term investments
It can cause significant swings and volatility
It has no effect on the stock market
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of expansionary monetary policy?
To reduce government spending
To decrease the money supply
To stimulate the economy
To increase inflation
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
During a recession, why might the Federal Reserve lower interest rates?
To decrease inflation
To increase the cost of borrowing
To reduce the money supply
To encourage more borrowing and spending
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What effect does raising interest rates have during times of inflation?
It increases the purchasing power of currency
It causes prices to rise further
It makes borrowing cheaper
It reduces liquid capital in circulation
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