Federal Reserve: 3 Tools - REVIEW

Front

In a recession, the Fed would likely

Back

Increase the supply of money in the economy

Front

If the United States is experiencing inflation, the Fed will likely

Back

Decrease the supply of money in the economy

Front

The actions undertaken by a nation's central bank to control money supply and achieve sustainable economic growth; it can be broadly classified as either expansionary or contractionary.

Back

Monetary policy

Front

Increasing the money supply eventually causes .....

Back

Inflation

Front

a rise in the cost of goods and services

Back

inflation

Front

Money loses its value when it becomes too plentiful.

Back

becomes too plentiful

Front

Raising the discount rate will reduce

Back

inflation

Front

Lowering the reserve requirement will reduce

Back

unemployment

Front

The interest rate the Fed charges commercial banks for loans

Back

Discount Rate

Front

Percentage of deposits that the Fed requires banks to hold back and not lend out

Back

Reserve Requirement Rate