Monetary Policy: The Federal Reserve

Question 1

Based on the information presented in the video, which of the following is likely to occur as a result of the Fed decreasing the money supply? Check all that apply.

Revolt · Accepted Answer

The inflation rate will stop growing or decrease.; Consumers will spend less money, causing an economic slowdown.; The unemployment rate may rise.

Question 2

What did you include in your response? Check any that apply.

Revolt · Accepted Answer

The Fed lent money to banks.; The Fed bought securities to lower mortgage rates.; The Fed tried to increase spending by lowering interest rates.

Question 3

unemployment✔ inflationstagflation

Revolt · Accepted Answer

inflation

Question 4

Free Banking Act✔ National Banking ActFederal Reserve Act

Revolt · Accepted Answer

National Banking Act

Question 5

Depression of 1865Panic of 1893✔ Panic of 1907

Revolt · Accepted Answer

Panic of 1907

Question 6

Choose the best word or phrase from each drop-down menu. The Federal Reserve increases the money supply when it is trying to encourage the economy to . Consumers are more willing to spend using credit when the money supply is higher because interest rates are . One major positive effect of increasing the money supply is in the unemployment rate.

Revolt · Accepted Answer

grow; The Federal Reserve increases the money supply when it is trying to encourage the economy to .: grow; Consumers are more willing to spend using credit when the money supply is higher because interest rates are .: lower; One major positive effect of increasing the money supply is in the unemployment rate.: a decrease

Question 7

Choose the best word or phrase from each drop-down menu. Open market operations influence the directly. In order to lower the Federal Funds Rate, the Fed will securities, which the money supply in banks.

Revolt · Accepted Answer

Selection 1: Federal Funds Rate; Selection 2: buy; Selection 3: increases

Monetary Policy: The Federal Reserve Answers

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