AnswersMO-EconomicsMonetary Policy: The Federal Reserve

Monetary Policy: The Federal Reserve Answers

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1
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In how many cities are Federal Reserve district banks located?

A
4
B
12
C
50
D
8
2
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What is a potential negative effect of an expansionary policy?

A
decreased borrowing
B
increased interest rates
C
increased inflation
D
decreased available credit
3

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.
4

best

I
It sells more securities.
I
It charges banks more interest.
I
It increases reserve requirements.
I
It increases the money supply.

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