Monetary Policy & the FED

Front

The _______________ is the central bank for the United States.

Back

Federal Reserve System

Front

The _____________ is the monetary policy-making body of the Federal Reserve System.

Back

Federal Open Market Committee (FOMC)

Front

The Federal Reserve has a dual mandate to use its tools to maintain both price stability and ______________.

Back

maximum employment

Front

____________ policy is conducted by the Federal Open Market Committee (FOMC).

Back

Monetary

Front

When the FOMC sees that the economy is slowing, and the goal of maximum employment is at risk, the committee is likely to __________ the target federal funds rate.

Back

lower

Front

When the FOMC observes that the economy is overheating, and the goal of price stability is at risk, the committee is likely to ______ the target federal funds rate.

Back

raise

Front

During a recession when unemployment is high the FED will pursue a loose monetary policy which make money ________ available.

Back

more

Front

During an inflationary period when prices are high the FED will pursue a tight monetary policy which make money ________ available.

Back

less

Front

In a time of recession and high unemployment, the FED will __________ the money supply to make borrowing easier for entrepreneurs who create jobs.

Back

increase

Front

During an inflationary period the FED will choose to _________ the money supply, making money less available for borrowing, which reduces spending which in turn will slow inflation.

Back

decrease