Econ Unit 3 Test Practice

Front

Open market operations, the discount rate, and reserve requirements are used by the Federal Reserve to most directly affect the —

Back

supply of money in the economy

Front

Which of the following is an action of the Federal Reserve that strongly influences local economies? It can raise or lower property taxes. It can provide stimulus money for job creation. It can require banks to provide savings accounts to the community. It can make loans cheaper or more expensive by adjusting interest rates.

Back

It can make loans cheaper or more expensive by adjusting interest rates.

Front

During an expansionary phase of the business cycle the government could implement a contractionary fiscal policy in order to —

Back

address any inflation issues

Front

Contractionary fiscal policies address inflationary economic problems and are intended to —

Back

decrease the amount of money in circulation

Front

High levels of unemployment combined with high levels of inflation and a shrinking economy could indicate that the business cycle has entered into a period of —

Back

recession

Front

The Federal Reserve System designed in the manner described above resulted in the creation of—

Back

a decentralized system of banks

Front

Which of the following best completes the graphic? Stock Exchange, Federal Reserve System, Treasury Department, Washington, D.C.

Back

Stock Exchange

Front

In order to require banks to hold more money as opposed to lending it, the Federal Reserve can —

Back

increase the reserve requirement

Front

One way the Federal Reserve can counter unemployment and stimulate spending is by —

Back

decreasing the discount rate

Front

Contractionary fiscal policies address inflationary economic problems and are intended to —

Back

decrease the amount of money in circulation