Pre-Test Monetary & Fiscal Policy

Front

The Federal Reserve is best described as:

Back

The Central Bank

Front

What year was the Federal Reserve established?

Back

1913

Front

What are the primary purposes of the Federal Reserve?

Back

Monetary Policy (Money Supply

Front

What are the effects of low interest rates?

Back

more money circulates in the economy

Front

What are the "risks" of rapid economic growth?

Back

Inflation

Front

The goal of tight money policy is to:

Back

control or slow inflation

Front

Why might the Federal reserve adopt a loose money policy?

Back

to encourage consumer spending

Front

What happens as the money supply increases?

Back

Increased inflation

Front

To prevent inflation the Federal Reserve could: Raise the discount rate, lower the discount rate

Back

lower the discount rate

Front

To stimulate economic growth the Federal Reserve could: Raise the discount rate, lower the discount rate

Back

lower the discount rate