Unit 4 Monetary Policy Practice

Front

Which of the following is an Expansionary Monetary Policy: Decrease Taxes, Sell bonds on the open market, Buy bonds on the open market, Increase bank reserve requirements?

Back

Buy bonds on the open market

Front

Which of the following is an Expansionary Monetary Policy?
Options:
Decrease reserve requirements,
Sell bonds on the open market,
Increase government spending,
Increase the Fed Funds Rate

Back

Decrease reserve requirements

Front

If The Fed was to decrease the discount rate, what type of policy is that?

Back

Expansionary Monetary Policy

Front

If the Fed engages in Expansionary Monetary Policy, what phase of the business cycle is the economy probably experiencing?

Back

Contraction

Front

Expansionary Monetary Policy is used to

Back

Increase the money supply and decrease unemployment

Front

Expansionary Monetary Supply has what effect on interest rates?

Back

Interest rates decrease

Front

What is the Fed's dual mandate?

Back

Low inflation and low unemployment

Front

By what means does the Fed effect the economy?

Back

By controlling the money supply.

Front

Which of the following would be considered Contractionary Monetary Policy?
Options:
Increasing required reserves,
Decreasing the discount rate,
Buying bonds on the open market,
Decreasing government spending

Back

Increasing required reserves

Front

Which of the following would be considered Contractionary Monetary Policy? Increasing taxes, Decreasing the federal funds rate, Decreasing required reserves, Selling bonds on the open market

Back

Selling bonds on the open market