WorksheetsMonetary policy
Total questions: 13
Worksheet time: 7mins
What is a negative effect of restrictive monetary policy
Lower inflation
Stabilized the economy
Higher unemployment rate
Increased spending and investment
According to the Federal Reserve, what is the target range for core inflation?
2% - 3%
2% - 2.5%
4,7% - 5,8%
below 6,5%
What are objectives of expansionary monetary policy?
To shift aggregate demand to the right
To reduce aggregate demand
Which of the following statements is NOT true about the contractionary monetary policy
Selling bonds in the open market
Injecting more money into the economy
Raising reserve requirements
Increasing the discount rate
What is the primary objective of monetary policy?
Reduce unemployment
Control inflation
Promote moderate long-term interest rates
Increase government spending
How can the central bank shift aggregate demand?
Making more or less money available
Increase or decrease government spending
Tax adjustment
All of above
The resulting shifts of aggregate demand could affect
The rate of output
The price level
The number of available jobs
All of above
What is considered the most important form of money in monetary policy?
Cash
Checks
Credit
Money market funds
Why does the Federal Reserve use reserve requirements as a policy tool?
To make sure banks always have some cash available
To directly control how much money banks can lend
To influence the overall money supply and economic stability
All of the above
What is the goal of restrictive monetary policy
To increase the money supply
To increase government spending
To increase household consumption and business investment
To reduce inflation and cool an overheating economy
What happens to the money supply when the Federal Reserve sells Treasury bonds?
The money supply fluctuates
The money supply remains unchanged
The money supply decreases
The money supply increases
According to the text, which tool is the Fed's primary method for day-to-day monetary operations?
Changing the reserve requirement
Changing the discount rate
Open market operations
Issuing new currency
What is the second tool of monetary policy?
(a)
