Monetary and Fiscal Policy- Practice At Home

Front

Which monetary policy decision is meant to increase the money supply? Options: Congress passes a rule to reduce personal income taxes., The Federal Reserve buys treasury bonds on the open market., Congress passes a bill to reduce regulations on monopolies., The Federal government borrows money from a foreign bank to cover a budget deficit.

Back

The Federal Reserve buys treasury bonds on the open market.

Front

The federal government's overall approach to spending and taxes is called

Back

Fiscal Policy

Front

Voting members of the FOMC include 7 members of the _______ and Presidents of the 12 district banks.

Back

Board of Governors

Front

Which of the following would cause the Federal Reserve to implement expansionary monetary policy? Options: The economy is expanding too quickly and inflation is a concern., The federal government passes a new budget with a large deficit., The economy is prosperous with low inflation., A recession has reduced aggregate demand and increased unemployment.

Back

A recession has reduced aggregate demand and increased unemployment.

Front

What would be the result of lowering interest rates on bank reserves held at the Federal Reserve?

Back

Money Supply increases
Aggregate Demand increases

Front

How many districts make up the regional component of the Federal Reserve?

Back

12

Front

The Federal Reserve does all of the following EXCEPT: act as the government's bank, regulate banking activity, provide check-clearing services to banks.

Back

raise taxes and determine government spending

Front

Franklin D. Roosevelt's New Deal would be an example of

Back

expansionary fiscal policy

Front

How does a budget deficit relate to the national debt?

Back

Budget deficits create the national debt.

Front

If an economy experiences a dramatic rise in prices, which fiscal policy action could be taken? Options: Selling securities on the open market, Raising interest rates, Reducing government spending, Raising reserve requirements

Back

Reducing government spending