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Monetary Policy: The Federal Reserve with questions and answers A+ graded, Exams of Economics of Education

1. In how many cities are Federal Reserve district banks located? - ✔✔12 2. monetary policy involves decreasing the money supply. - ✔✔Contractionary 3. Why does the Fed pay interest to banks? - ✔✔It is interest on money held in reserve. 4. Which best describes what a central bank uses monetary policy to do? - ✔✔steer the economy away from recession and toward growth 5. What is the full name of the US central bank, known as the Fed? - ✔✔the Federal Reserve Bank 6. Which of these is a banking activity of the Fed? - ✔✔storing money for banks 7. Which statement best describes how the Fed's use of open market operations affects banks? - ✔✔It affects banks' liquidity. 8. If the domino effect occurs as a result of changes in the money supply, what will most likely happen as an immediate result of banks having more money to lend? - ✔✔Interest rates will decrease

Typology: Exams

2024/2025

Available from 09/06/2024

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Monetary Policy: The Federal Reserve
1. In how many cities are Federal Reserve district banks located? - ✔✔12
2. monetary policy involves decreasing the money supply. - ✔✔Contractionary
3. Why does the Fed pay interest to banks? - ✔✔It is interest on money held in
reserve.
4. Which best describes what a central bank uses monetary policy to do? - ✔✔steer
the economy away from recession and toward growth
5. What is the full name of the US central bank, known as the Fed? - ✔✔the Federal
Reserve Bank
6. Which of these is a banking activity of the Fed? - ✔✔storing money for banks
7. Which statement best describes how the Fed's use of open market operations
affects banks? - ✔✔It affects banks' liquidity.
8. If the domino effect occurs as a result of changes in the money supply, what will
most likely happen as an immediate result of banks having more money to lend? -
✔✔Interest rates will decrease.
9. What is a potential negative effect of an expansionary policy? - ✔✔increased
inflation
10. Why is the Fed often referred to as a "lender of last resort," or the last lender to turn
to in a crisis? - ✔✔It offers banks financial protection to keep consumers from
panicking.
11. Which statement best describes how the Fed responds to recessions? - ✔✔It
increases the money supply.
12. Economists studying the money supply categorize the status of the money based on
- ✔✔liquidity.
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Monetary Policy: The Federal Reserve

  1. In how many cities are Federal Reserve district banks located? - ✔✔ 12
  2. monetary policy involves decreasing the money supply. - ✔✔Contractionary
  3. Why does the Fed pay interest to banks? - ✔✔It is interest on money held in reserve.
  4. Which best describes what a central bank uses monetary policy to do? - ✔✔steer the economy away from recession and toward growth
  5. What is the full name of the US central bank, known as the Fed? - ✔✔the Federal Reserve Bank
  6. Which of these is a banking activity of the Fed? - ✔✔storing money for banks
  7. Which statement best describes how the Fed's use of open market operations affects banks? - ✔✔It affects banks' liquidity.
  8. If the domino effect occurs as a result of changes in the money supply, what will most likely happen as an immediate result of banks having more money to lend? - ✔✔Interest rates will decrease.
  9. What is a potential negative effect of an expansionary policy? - ✔✔increased inflation
  10. Why is the Fed often referred to as a "lender of last resort," or the last lender to turn to in a crisis? - ✔✔It offers banks financial protection to keep consumers from panicking.
  11. Which statement best describes how the Fed responds to recessions? - ✔✔It increases the money supply.
  12. Economists studying the money supply categorize the status of the money based on
    • ✔✔liquidity.
  1. The ... rate is the interest rate banks charge each other for borrowing or storing money. - ✔✔federal funds
  2. When the Fed adjusts its interest rate, it directly influences consumer - ✔✔borrowing
  3. Which best describes a central bank's primary role? - ✔✔create monetary policy
  4. Which statements describe how the Fed responds to high inflation? - ✔✔It charges banks more interest
  5. It sells more securities
  6. It decreases the money supply