Inflation and Stagflation (continued)

Question 1

Identify the goals of the central bank when creating monetary policy. Check all that apply.reducing employmentinfluencing the business cyclereducing economic growthencouraging economic growthavoiding periods of time where little credit is available

Revolt · Accepted Answer

B: influencing the business cycle; D: encouraging economic growth; E: avoiding periods of time where little credit is available

Question 2

The Fed uses open market operations by buying and selling .

Revolt · Accepted Answer

B: securities

Question 3

Which factor most directly influences how much money consumers are willing to borrow?

Revolt · Accepted Answer

D: changing interest rates

Question 4

In this scenario, what is the Fed trying to do by increasing interest rates? Check all that apply.

Revolt · Accepted Answer

A: decrease the amount of money that banks have to lend; C: reduce the amount of available credit; D: discourage consumer borrowing by increasing interest rates on loans

Question 5

The Federal Reserve is the within the United States.

Revolt · Accepted Answer

B: central bank

Question 6

Increasing the amount of credit that is available within an economy is done through monetary policy.

Revolt · Accepted Answer

A: expansionary

Question 7

The rate at which banks lend money and charge one another for storing money in the Fed is known as the .

Revolt · Accepted Answer

C: Federal Funds Rate

Question 8

The Federal Reserve’s role is to promote economic growth and by enacting monetary policy.

Revolt · Accepted Answer

A: stability

Question 9

The potential to cause inflation is accompanied by monetary policy.

Revolt · Accepted Answer

A: expansionary

Question 10

A(n) monetary policy can cause interest rates to increase.

Revolt · Accepted Answer

B: contractionary

Inflation and Stagflation (continued) Answers

More from this Course

TRY EDGENUITY HACKS