"The Fed" Review Macro

In a recession when inflation is really low, the Fed would likely

• Increase the supply of money in the economy (easy money)

• Decrease the supply of the money in the economy (tight money)

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

• Increase the supply of money in the economy (easy money)

• Decrease the supply of money in the economy (tight money)

The Federal Reserve

• is made up of 12 district banks divided into geographic areas and their 25 branch banks.

• is managed by a 12-member board of directors.

• is made up of district banks that operate independently from one another.

• is a group of 10 cities with the largest banks in the united states

The Federal Reserve System was established in __________ to serve the government using tools such as open market operations or buying and selling government securities.

• 1799

• 1913

• 1863

• 1881

What does Inflation do to interest rates and the demand of money?

• Makes it go up and the demand for money go down.

• Makes it go down and the demand for money goes up.

• Makes it stay the same.

• has little or no effect on the economy

Influencing the economy by changing the reserve requirement, real GDP or the rate of inflation is called:

• Fiscal policy

• Monetary policy

• Tight Money

• Easy Money

Does increasing the money supply cause inflation or deflation?

• Inflation
• Deflation

"The Fed" refers to the....

• Federal Bureau of Investigation
• Federal Government
• Federal Reserve System
• Federal Income Tax

The goal of monetary policy is to 

• sell bonds
• reduce unemployment
• seek price stability
• red and blue

Increasing the reserve requirement or using a "tight money" policy 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.