Federal Reserve: 3 Tools Dec. 2022

Increasing the reserve requirement has which of the following results:

• More is lent out and more is paid in interest
• More is lent out and less is paid back in interest
• Less is lent out and more is paid in interest
• Less is lent out and less is lent in interest.

In a recession, the Fed would likely

• Increase the supply of money in the economy
• Decrease the supply of the money in the economy

If the United States is experiencing inflation, the Fed will likely

• Increase the supply of money in the economy
• Decrease the supply of money in the economy

a rise in the cost of goods and services that do not match its true value

• inflation

• discount rate

• interest

• monetary policy

Money loses its value when it

• It becomes too plentiful
• becomes too portabale
• is divisible
• is durable

The goal of monetary policy is to 

• sell bonds

• reduce unemployment

• achieve economic stability

Raising the discount rate will reduce

• unemployment
• inflation

Lowering the reserve requirement will reduce

• unemployment
• inflation

The Federal Reserve uses its 3 tools of ______ to regulate the economy.

• Monetary Policy
• Fiscal Policy

The interest rate the Fed charges commercial banks for loans

• Fed Fund Rate
• Reserve Requirement Rate
• Discount Rate
• I.O.U Rate