#48 MONETARY AND FISCAL POLICY: CRASH COURSE GOVERNMENT AND POLI

What is the primary task of the Federal Reserve System?

• To regulate state banks

• To control the money supply

• To manage local banks

• To set tax rates

How does the Federal Reserve influence the amount of money in circulation?

• By printing more money

• By increasing taxes

• By reducing government spending

• By setting interest rates and reserve requirements

What happens when the Federal Reserve lowers the discount rate?

• Banks borrow less money

• More money goes into circulation

• Inflation decreases

• Interest rates increase

What is Fiscal Policy primarily concerned with?

• Regulating the money supply

• Managing local banks

• Raising taxes and government spending

• Setting interest rates

What is one reason why the government might have a budget deficit?

• High interest rates

• Low inflation

• Spending more money than it raises in taxes

• Increasing the reserve requirement