Econ- Chapter 15

Test Description: Fed

Instructions: Answer all questions to get your test result.

1) Monetary policy that makes credit expensive and in short supply is called:

2) Regulation set by the Fed requiring banks to keep a certain percentage of their deposits in cash is called:

3) Monetary policy that makes credit inexpensive and abundant is called:

4) A system in which only a fraction of the deposits in a bank is kept on hand is called:

5) Which of the following is a result of a loose monetary policy?

6) Which of the following is a result of a tight monetary policy?

7) Why would a country want a tight monetary policy?

8) Fractional reserve banking makes it possible for banks to:

9) The buying and selling of U.S. securities by the Fed to affect the money supply is called:

10) The rate of interest that banks charge on loans to their best business customers is called:

11) The interest rate that the Fed charges on loans to banks is called:

12) The interest rate that banks charge each other on loans is called:

13) If the Fed lowers the reserve requirement:

14) To decrease the money supply, the Fed can:

15) Which of the following might result if the Fed increases the discount rate?

16) A high prime rate:

17) One problem in carrying out monetary policy is the:

18) The Fed can affect the money supply by:

19) Which of the following is affected by decisions of the Federal Open Market Committee?

20) If the Federal Reserve adopts an expansionary monetary policy:


*select an answer for all questions

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