AnswersMO-Personal FinanceUnderstanding Checking and Debit Accounts

Monetary Policy: The Federal Reserve Answers

0 verified answers
1
Free Preview

Which statements describe how the Fed responds to high inflation? Check all that apply.

A
It charges banks more interest.
B
It pays banks less interest.
C
It sells more securities.
D
It decreases the money supply.
E
It increases the money supply.
2
Free Preview

[BLANK]

A
low
B
stable
C
high
3

Which best describes a central bank's primary goals?

A
limiting inflation and reducing unemployment
B
reducing unemployment and maintaining cash flow
C
controlling stagflation and reducing unemployment
D
managing credit and ensuring the money supply's liquidity
4

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

A
saving.
B
spending.
C
borrowing.
D
investing.
5

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

A
interest rates.
B
liquidity.
C
inflation rates.
D
credit.
6

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.
7

[BLANK]

A
Contractionary
B
Expansionary
C
Fixed
8

In how many cities are Federal Reserve district banks located?

A
4
B
12
C
50
D
8
9

Which of these is a banking activity of the Fed?

A
printing money
B
regulating securities markets
C
storing money for banks
D
funding government programs
10

Which best describes a central bank's primary role?

A
controlling inflation
B
increasing credit
C
printing money
D
creating monetary policy

Did you find these answers helpful?

Monetary Policy: The Federal Reserve Answers…