WorksheetsThe Federal Reserve
Total questions: 20
Worksheet time: 10mins
What is Gross Domestic Product (GDP)?
the primary quantitative measure of economic activity for a nation
dollar value of all final G/S produced in a country in a 12 month period
the sum of consumption by households, investment by businesses, government spending, and net exports
all of these answers are correct
none of these answers are correct
In addition to monitoring banking & economic conditions, what are some of the functions of the Federal Reserve System?
banking services for the gov't, issuing currency, raising/lowering taxes
raising the debt ceiling, setting the discount rate, issuing currency
setting the discount rate, regulating banks, regulating gov't spending
banking services for the gov't, buying/selling US bonds, issuing currency
The FED increases/decreases the nation’s money supply in order to meet the 3 main government economic goals. These goals are
decrease in prices, full employment, reduction in gross domestic product
stable prices, full employment, economic growths
consistent prices, regulation of the stock market, reduce gov't spending
increase in prices, full unemployment, economic growth
The FED's open market operations refers to
changing the interest rate on loans
paying member banks interest on the money they hold in reserve
The buying or selling of bonds
raising or lowering the discount rate
What are the phases of the business cycle, in order as labeled in this image?
A=peak, B=contraction, C=trough, D=expansion
A=peak, B=trough, C=contraction, D=expansion
A=contraction, B=expansion, C=trough, D=peak
A=trough, B=expansion, C=peak, D=contraction
The FRS uses tight money policy tools in the _______ and _______ phases of the business cycle.
contraction & trough
peak & trough
expansion & contraction
peak & expansion
Which of the following actions by the FRS is most likely to increase the money supply?
selling government bonds in open market operations
decreasing the discount rate
increasing interest on reserves
increasing reserve requirements
What is the Federal Reserve System?
the central banking system of the United States.
a government office for regulating the budget of the United States of America.
the banking system of the southeast
the office that controls tax rates and government spending
The US economy is currently in the phase depicted by the letter D on the graph displayed. Which monetary policy will the FRS use?
easy money
contractionary
expansionary
tight money
If the US economy is in the phase B on this graph, what monetary policy will the Federal Reserve apply?
easy money
expansionary
tight money
contractionary
You have been selected as Chairman of the Federal Reserve System by the president and confirmed by Congress when the US economy is during an expansionary phase of the business cycle. As chairman of the FED, ________ is your greatest concern.
inflation
cyclical unemployment & its impact on the retail and industrial sectors
deflation
where to eat lunch
In the economic situation represented by this graph, the FED will use a _______ monetary policy, where Congress and the President will enact a contractionary fiscal policy.
easy money
outside lag
tight money
inside lag
As Chairman of the FRS, you are presented with the situation in this graph. You recognize the situation as one of
deflation
Expansion
Contraction
recession
How is the Chairman of the FRS selected for the job?
the former Chairman chooses the new Chairman
the President nominates the candidate & the Senate confirms the candidate selected
interested candidates apply for it online
the head of the regional banks with the most seniority gets the job
