Monetary Policy

Front

The central bank in the USA that regulates the monetary system

Back

The FED

Front

The primary role of the Federal Reserve Bank is to steer the economy by

Back

controlling the money supply.

Front

Cash that banks must keep in the vault.

Back

required reserves

Front

Which of the following scenarios would cause the nation’s money supply to INCREASE? Decreasing government spending, Lowering interest rates, Raising interest rates, Raising the Interest on Reserve Balances (IORB) rate.

Back

Lowering interest rates

Front

What happens to the money circulation, when the FED orders a "tight" money policy?

Back

less money is put into circulation

Front

What action would the Federal Reserve take to control inflation? Options: Increase the Interest on Reserve Balances (IORB) interest rate., Decrease the Interest on Reserve Balances (IORB) interest rate., Increase taxes, Print more money

Back

Increase the Interest on Reserve Balances (IORB) interest rate.

Front

Lowering interest rates to stimulate the economy is called:

Back

Expansionary monetary policy

Front

An expansionary policy means that the Fed is attempting to

Back

increase the size of the nation's money supply

Front

A contractionary policy means that the Fed is attempting to

Back

decrease the size of the nation's money supply

Front

Which policy would help fight inflation? Options: Expansionary, Contractionary

Back

Contractionary