Mrs. Tontodonati



Macroeconomic Concepts - (SSEMA2) Federal Reserve?1)?The process by which the Federal Reserve controls the supply, availability, and cost of money in order to keep the economy stable isA)fiscal policy.B)monetary policy.C)the interest rate.D)the discount rate.2)?When the Federal Reserve sells government securities on the open market, what effect does this action have on the nation’s money supply and interest rates?A)Money Supply - Decreases / Interest Rates - IncreaseB)Money Supply - Increases / Interest Rates - IncreaseC)Money Supply - Decreases / Interest Rates - DecreaseD)Money Supply - Increases / Interest Rates - Decrease3)?What is the name of the "central bank" of the United States?A)Bank of the U.S.B)The Federal ReserveC)U.S. Congressional BankD)The Federal Bank of America4)?Monetary policy is BEST described asA)benefits received by employees in addition to wages and salaries.B)actions by the Federal Reserve System to expand or contract the money supply.C)a system that relies on supply and demand to determine the value of one currency to another.D)actions by the federal government to use spending and revenue collection to influence the economy.5)?What would MOST LIKELY happen if the Federal Reserve decided to increase the reserve requirement in banks?A)The amount of federal taxes people owe would decrease.B)The amount of federal taxes people owe would increase.C)The amount of money circulating in the economy would decrease.D)The amount of money circulating in the economy would increase.6)?The Federal Reserve wants to increase the money supply in the United States. What is the Federal Reserve likely to do to accomplish this?A)reduce the discount rateB)sell securities on the open marketC)increase the reserve requirement for banksD)require banks to hold a reserve for all types of deposits7)· setting the discount and interest rates· establishing reserve requirements for banks· buying and selling US government securitiesAll of these are ways in which the Federal Reserve system canA)control the stock market.B)regulate the money supply.C)decrease consumer spending.D)challenge Presidential power.8)?What consumer behavior is the Federal Reserve Board trying to encourage when it implements a loose monetary policy?A)increased saving and spendingB)decreased saving and spendingC)increased saving and reduced spendingD)decreased saving and increased spending9)?Which of these actions of the Federal Reserve can slow economic growth?A)The Federal Reserve regulates the amount of money that flows into and out of the nation’s economy.B)The Federal Reserve buys securities, which puts money back into the hands of people who can spend it in the marketplace.C)The Federal Reserve decreases the reserve requirement and banks have more money to loan to people who want to borrow it.D)The Federal Reserve increases the discount rate, which causes interest rates to rise and people to save rather than to spend.10)?What is the term for the situation where more money is available for borrowing and investment?A)loose moneyB)open marketC)tight moneyD)fiscal policy11)?How might monetary policy be used to combat inflation fears?A)The Federal Reserve might lower taxes.B)The Federal Reserve might raise taxes.C)The Federal Reserve might lower interest rates.D)The Federal Reserve might raise interest rates.12)?What is a main goal of the Federal Reserve in its monetary policy?A)lowering taxesB)to curb recessionsC)increasing government spendingD)regulation of the stock market13)?The Federal Reserve has kept interest rates very low. Some might argue that this could lead toA)inflation.B)deflation.C)a strong dollar.D)higher unemployment.14)?The Federal Reserve System controls the size of theA)tax supply.B)money supply.C)demand supply.D)production supply.15)?Which of these is primarily responsible for the control of the money supply in the United States?A)the U.S. TreasuryB)the Federal ReserveC)the executive branchD)the legislative branch16)The above chart represents the organization of the Federal Reserve System.Which of these correctly completes the chart?A)Federal Reserve ChairmanB)Federal Open Market CommitteeC)President of the United StatesD)Senate and House of Representatives17)?The Federal Reserve uses various measures to change the money supply and encourage economic activity. This is referred to asA)fiscal policy.B)monetary policy.C)demand economics.D)supply side economics.18)?What would MOST LIKELY happen if the Federal Reserve System lowered interest rates?A)Trade would increase over the long run.B)Unemployment would be reduced in the short run.C)The demand for goods would decrease in the short run.D)The price of goods would remain stable over the long run.19)?Which has LEAST LIKELY been the historical goal of the Federal Reserve's monetary policy?A)Keeping unemployment rates lowB)Decreasing the national debtC)Holding prices stableD)Sustainable growth20)· Atlanta· Boston· Cleveland· DallasAll of these representA)state capitals.B)cities with major ports.C)U.S. Court of Appeals cities.D)Federal Reserve System districts.21)?How does a monetary policy of low interest rates affect consumers?A)It promotes deflation.B)It lowers savings rates.C)It lowers spending rates.D)It lowers the cost of imports.22)?What would be reasonable monetary policy if the economy was in a recession?A)cut taxesB)raise taxesC)reduce the money supplyD)increase the money supply23)?During the 1970s the Federal Reserve allowed rapid credit expansion in order to combat unemployment. What was the MOST LIKELY?unintended?result of this monetary policy action?A)A drop in unemployment ratesB)A period of stagflationC)The Oil Crisis of 1973D)A period of deflation24)?Although the members of the Board of Governors of the Federal Reserve System are appointed by the president, the Board does not receive funding from Congress. The seven members serve a 14 year term, and report to the Speaker of the House once a year. This MOST LIKELY results inA)more oversight from the executive branch.B)more oversight from the legislative branch.C)significant control by the Treasury Department.D)relative independence of the Federal Reserve System.25)?Which of these would deter inflation?A)a decrease in interest ratesB)an increase in economic growthC)an increase in consumer spendingD)a decrease in the price of securities26)?A short-term monetary policy action would MOST LIKELYA)lower federal taxes.B)lower interest rates.C)raise medicare coverage.D)raise unemployment insurance.27)?During a recession, what must happen to interest rates to spur economic growth?A)dropB)increaseC)remain stableD)increase and decrease28)?If the Federal Reserve adopts an expansionary monetary policy,A)interest rate fall and credit is tight.B)interest rates rise and credit is tight.C)interest rates rise and credit is abundant.D)interest rates fall and credit is abundant.29)?What would be reasonable monetary policy during a period of high inflation?A)cut taxesB)raise taxesC)reduce the money supplyD)increase the money supply30)?You want a new truck. How can the Federal Reserve's raising of the discount rate affect your decision to purchase the truck?A)It will raise interest rates and make your truck payment lower.B)It will lower interest rates and make your truck payment higherC)It will lower interest rates and make your truck payment lower. D) It will raise interest rates and make your truck payment higher. ................
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