Monetary Policy Review

Front

GDP growth is slowing, and businesses are cutting jobs. Which Fed action would help? Options: Sell bonds, Buy bonds, Raise reserve requirement, Raise interest rates

Back

Buy bonds

Front

Consumer prices are rising rapidly. Which Fed action would reduce money supply?

Back

Sell bonds

Front

Businesses are investing less due to sluggish demand. Which Fed policy would help?

Back

Lower reserve requirement

Front

During a severe downturn, what should the Fed do to encourage lending?

Back

Lower reserve requirement

Front

Inflation is too high and consumers are spending excessively. What should the Fed do?

Back

Raise interest rates

Front

The Fed wants to slow down borrowing and spending. What should it do?

Back

Raise interest rates

Front

To stimulate the economy during unemployment, the Fed should: Buy bonds, Sell bonds, Raise discount rate, Raise reserve requirement

Back

Buy bonds

Front

Inflation is at record highs. Which combination of policies is best? Options: Raise interest rates, sell bonds, raise reserve requirement; Lower interest rates, buy bonds, lower reserve requirement; Buy bonds, lower discount rate, lower reserve requirement; Increase government spending, buy bonds, raise reserve requirement

Back

Raise interest rates, sell bonds, raise reserve requirement

Front

In a slow recovery, the Fed wants to put more money into circulation. What should it do?

Back

Buy bonds

Front

In a boom economy, credit is too cheap and borrowing is high. The Fed should:

Back

Raise interest rates