Monetary Policy: The Federal Reserve

Question 1

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

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It offers banks financial protection to keep consumers from panicking.

Question 2

Economists studying the money supply categorize the status of the money based on

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liquidity.

Question 3

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

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money available to lend.

Question 4

best

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limiting inflation and reducing unemployment

Question 5

Which best describes a central bank's primary role?

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creating monetary policy

Question 6

In how many cities are Federal Reserve district banks located?

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12

Question 7

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

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the Federal Reserve Bank

Question 8

best

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steer the economy away from recession and toward growth

Question 9

Which of these is a banking activity of the Fed?

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storing money for banks

Monetary Policy: The Federal Reserve Answers