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

✔ buysell

Revolt · Accepted Answer

✔ buy

Question 3

decreases✔ increases

Revolt · Accepted Answer

✔ increases

Question 4

unemployment✔ inflationstagflation

Revolt · Accepted Answer

inflation

Question 5

Free Banking Act✔ National Banking ActFederal Reserve Act

Revolt · Accepted Answer

National Banking Act

Question 6

Depression of 1865Panic of 1893✔ Panic of 1907

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Panic of 1907

Question 7

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

Monetary Policy: The Federal Reserve Answers

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