AnswersEconomicsMonetary Policy: The Federal Reserve

Monetary Policy: The Federal Reserve — Quiz Answers

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21
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Which of these is a banking activity of the Fed?

A
storing money for banks
B
regulating securities markets
C
funding government programs
D
printing money
22
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The Fed’s use of open market operations affects banks’

A
interest rates.
B
lending practices.
C
stability.
D
money available to lend.
23

Which best describes what a central bank uses monetary policy to do?

A
steer the economy away from recession and toward growth
B
ensure that the government is sufficiently funded
C
ensure that the government has a balanced budget
D
influence financial institutions globally
25

Why does the Fed pay interest to banks?

A
It is interest on money held in reserve.
B
It is interest on credit available to the Fed.
C
It is interest on loans taken by the Fed.
D
It is interest on government investments.
26

Why does the Fed pay interest to banks?

A
It is interest on government investments.
B
It is interest on credit available to the Fed.
C
It is interest on money held in reserve.
D
It is interest on loans taken by the Fed.
27

What is the full name of the US central bank, known as the Fed?

A
the Federal Financial Institution
B
the Federal Deposit Insurance Corporation
C
the Federal Reserve Bank
D
the Federal Bank
28

What is the full name of the US central bank, known as the Fed?

A
the Federal Bank
B
the Federal Financial Institution
C
the Federal Deposit Insurance Corporation
D
the Federal Reserve Bank
29

Which best describes what a central bank uses monetary policy to do?

A
steer the economy away from recession and toward growth
B
ensure that the government has a balanced budget
C
ensure that the government is sufficiently funded
D
influence financial institutions globally
30

Which best describes what a central bank uses monetary policy to do?

A
ensure that the government has a balanced budget
B
influence financial institutions globally
C
ensure that the government is sufficiently funded
D
steer the economy away from recession and toward growth
31

Why is the Fed often referred to as a “lender of last resort,” or the last lender to turn to in a crisis?

A
It keeps all failing banks afloat to avoid economic disruption.
B
It lends consumers money when other banks will not.
C
It offers banks financial protection to keep consumers from panicking.
D
It helps finance and stabilize central banks internationally.
33

The Fed’s use of open market operations affects banks’

A
lending practices.
B
stability.
C
interest rates.
D
money available to lend.
34

What is the full name of the US central bank, known as the Fed?

A
the Federal Bank
B
the Federal Reserve Bank
C
the Federal Deposit Insurance Corporation
D
the Federal Financial Institution
35

Which of these is a banking activity of the Fed?

A
printing money
B
storing money for banks
C
regulating securities markets
D
funding government programs
36

What is a potential negative effect of an expansionary policy?

A
decreased available credit
B
increased interest rates
C
decreased borrowing
D
increased inflation
38

Why is the Fed often referred to as a “lender of last resort,” or the last lender to turn to in a crisis?

A
It keeps all failing banks afloat to avoid economic disruption.
B
It offers banks financial protection to keep consumers from panicking.
C
It lends consumers money when other banks will not.
D
It helps finance and stabilize central banks internationally.
39

Why is the Fed often referred to as a “lender of last resort,” or the last lender to turn to in a crisis?

A
It offers banks financial protection to keep consumers from panicking.
B
It keeps all failing banks afloat to avoid economic disruption.
C
It helps finance and stabilize central banks internationally.
D
It lends consumers money when other banks will not.

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