What is the primary goal of monetary policy?

Understanding Monetary Policy Quiz

Quiz
•
Business
•
9th - 12th Grade
•
Medium
Cindy Magliula
Used 1+ times
FREE Resource
10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
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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