Understanding Monetary Policy Quiz

Understanding Monetary Policy Quiz

9th - 12th Grade

10 Qs

quiz-placeholder

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Understanding Monetary Policy Quiz

Understanding Monetary Policy Quiz

Assessment

Quiz

Business

9th - 12th Grade

Medium

Created by

Cindy Magliula

Used 1+ times

FREE Resource

10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the primary goal of monetary policy?

To ensure the stability of the government

To control inflation and maintain employment levels

To regulate the stock market

To ensure that all citizens have a bank account

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which institution is primarily responsible for implementing monetary policy in the United States?

The Treasury Department

The Federal Reserve

The World Bank

The International Monetary Fund

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What are reserve requirements?

The amount of funds that a bank must hold in reserve against specified deposit liabilities

The requirements for a country to enter the European Union

The amount of money a company must reserve for emergencies

The reserves a country must have before it can print its currency

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is NOT a tool of monetary policy?

Open market operations

Reserve requirements

Fiscal policy

Discount rate

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How does the Federal Reserve use open market operations as a monetary policy tool?

By setting the national budget

By buying or selling government securities

By changing the reserve requirements for banks

By adjusting the tax rates

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What happens when the Federal Reserve increases the reserve requirements for banks?

Banks can lend more money

Banks have to hold more money in reserve, thus can lend less

The stock market automatically goes up

It has no effect on lending practices

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the purpose of the discount rate in monetary policy?

It is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility

It is the rate at which inflation is expected to discount future cash flows

It is a discount offered to consumers to encourage spending

It is the rate used to discount future earnings to their present value

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