The Fed And Monetary Policy Question Preview (ID: 19430)
The Fed And Monetary Policy.
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When would you want to use EASY money policy?
a) Expansion phase and unemployment
b) Expansion phase and inflation
c) Recession phase and unemployment
d) Recession phase and inflation
What are the 3 tools for Monetary Policy?
a) Discount rate, Reserve excess, open mitigation markets
b) Discount rate,Reserve requirements,Open Market Operations
c) Discount rate,Reserve liabilities, Overflow markets
d) Discount rate,Reserve investments,Overestimation markets
During a recession the FED will most likely react by
a) A raising the discount rate to affect the monetary supply
b) easing monetary policy making easier to lend money
c) tightening the monetary policy making lending more difficult
d) reducing open market transactions to reduce the money supply
Who is NOT a part of the structure of the Fed?
a) 12 Board of Governors
b) 7 District Banks
c) FOMC
d) FAMC
A decline in value of the US dollar will likely result in an increase in the ………
a) use of bartering
b) price of products
c) use of credit cards
d) amount of gold reserves
Which is NOT a goal of Monetary Policy?
a) full employment
b) economic prosperity
c) stable prices
d) economic growth
Which is NOT a responsibility of the FED?
a) Monitor the nation's tax policies.
b) Nation's monetary policy
c) Supervise and regulate the system of banks
d) Operate nation wide payments
What is the purpose of the Fed?
a) Ensure that banks followed all the rules.
b) Ensure a stable economy for the short term.
c) Ensure a stable environment for the long term.
d) Ensure a stable economy for the long term.
Why was the Fed created?
a) Government needed a way to collect taxes.
b) Government needed a Central Bank.
c) Government needed a Commercial Bank.
d) Government needed a way to communicate better.
When would you use TIGHT money policy?
a) Expansion phase and unemployment
b) Expansion phase and inflation
c) Recession phase and unemployment
d) Recession phase and inflation
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