Transcript Monetary Policy Practice

It collects information about each Federal
Reserve District and reports on economic
conditions to the Board of Governors.
Composed of seven members appointed
by the President, it oversees the Federal
Reserve System.
It redraws the map of the twelve Federal
Reserve Districts every ten years in
response to economic changes.
It makes key decisions about interest
rates and the growth of the United States
money supply.
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fiscal policy
easy money policy
tight money policy
policy lags
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It would cause the money supply to
contract.
It would increase the money
multiplier.
It would cause the money supply to
expand
It would have no effect on the
money supply.
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As interest rates decrease, demand
for money increases.
As interest rates increase, demand
for money increases.
Interest rates are determined by
demand for money.
Interest rates and demand for
money are unrelated.
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A recession has reduced aggregate
demand and increased unemployment.
The federal government passes a new
budget with a large deficit.
The economy is prosperous with
relatively low inflation and low
unemployment.
The economy is expanding quickly and
inflation is a concern.
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Reduce the discount rate
Raise the required amount of
reserve
Increase the prime rate
Reduce the money supply
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Increases
Decreases
Remains the same
Could either increase or decrease
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The discount rate
The required reserve ratio
The federal tax code
Open market operations
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The required reserve ratio
The money multiplier
Open market operations
The discount rate
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Establish monetary policy
Establish fiscal policy
Establish trade policy
Balance the federal budget
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In a recession
When the inflation rate is too
high
When aggregate demand is too
high
When the economy is
expanding
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The United States Treasury
The United States Mint
The Federal Reserve System
The Securities and Exchange
Commission
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To buy bonds
To balance the budget
To supply cash withdrawals
To endure business investment
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The president, Congress, and the
Cabinet
The Internal Revenue Service and
the Office of Management and
Budget
12 banks in different regions of
the US and the Federal Open
Market Committee
All banks, savings and loans, and
credit unions in the US
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Monetary policy involves the money
supply, while fiscal policy involves
government taxing and spending
decisions
Fiscal policy involves the money
supply, while monetary policy
involves government taxing and
spending decisions
Fiscal policy involves specific steps
taken to carry out the overall
monetary policy
They are the same
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