Monetary Policy: The Federal Reserve

Question 1

lowstablehigh

Revolt · Accepted Answer

high

Question 2

Federal Reserve interest federal fundsloan interest

Revolt · Accepted Answer

federal funds

Question 3

When the Fed adjusts its interest rate, it directly influences consumer

Revolt · Accepted Answer

borrowing.

Question 4

Which statement describes how borrowers will most likely benefit when the Fed reduces reserve requirements?

Revolt · Accepted Answer

Interest rates will likely decrease.

Question 5

Why does the Fed pay interest to banks?

Revolt · Accepted Answer

It is interest on money held in reserve.

Question 6

What is a potential negative effect of an expansionary policy?

Revolt · Accepted Answer

increased inflation

Question 7

most likely

Revolt · Accepted Answer

Interest rates will decrease.

Question 8

best

Revolt · Accepted Answer

steer the economy away from recession and toward growth

Question 9

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

Revolt · Accepted Answer

the Federal Reserve Bank

Question 10

best

Revolt · Accepted Answer

It increases the money supply.

Monetary Policy: The Federal Reserve Answers