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WorksheetsAP Monetary Policy
Total questions: 20
Worksheet time: 10mins
"The Fed" is the nickname for the:
Federal Reserve Bank of the United States
Federal Bureau of Investigation
Federal government
Jimmy "The Fed" Federico
Who puts US paper currency into circulation?
The Fed
The Treasury Department
The US Mint
The House of Representatives
Which is NOT a job of the Fed?
Process checks for the federal government
Loan money to individuals and small businesses
Regulate the money supply
Clear checks
What term is used to describe an increase in the general price of goods?
Inflation
Deflation
Stagflation
Monetary policy
Finish the statement: Monetary policy affects the _____________________, primarily through changing _____________.
money supply, interest rates
Budget, fiscal policy
interest rates, reserve requirement
Federal Reserve, printing money
If you want to speed up the economy, the Fed can _________ the money supply by __________ interest rates.
increase, decreasing
decrease, increasing
maintain, maintain
increase, increase
If you want to slow down the economy, the Fed can _________ the money supply by __________ interest rates.
increase, decreasing
decrease, increasing
maintain, maintain
increase, increase
The Fed uses interest rates to try and influence:
Unemployment rate & inflation
Housing market & food prices
Student loan debt & national deficit
Inflation & fiscal policy
Ideally, the Fed's target for unemployment is ______.
2%
0%
5%
10%
Ideally, the Fed's target for inflation is:
2%
0%
5%
10%
Monetary Policy has these tools
OMO, DR AND RR
OMO, DR and G
G and T
RR AND DD
Expansionary Monetary policy moves the
MS line to the left
AD line to the left
MD line to the left
MS line to the right
OMO means
Open Market Operations
Open Market Oxymoron
Odd Man Out
Odd Money Operations
Expansionary Monetary Policy could be
Increase DR
Increase RR
Decrease DR
Increase RR
Expansionary Money Supply can have the side effect of
raising iinterst rates
causing inflation
causing stagflation
raising unemployment
Contractionary Monetary policy could be
Sell Bonds
Increase RR
Increase DR
All of the above
What type of policy causes an increase in Xn?
Expansionary
Contractionary
Binary
Contrary
What type of policy increases both interest rates and the dollar relative to other currencies?
Expansionary Monetary
Contractionary Monetary
Who controls the Money Supply?
The Bank
The President
The Chairman
The FED
The Monetary Equation of Exchange is
C+IG+G+Xn
r = n-Inf
MV=PQ
n = r + Infl
