Which group inside the Federal Reserve actually manages the money supply?

The Federal Open Market Committee

In a period of economic contraction, what is the most likely monetary policy?

Buying Treasury bonds on the open market

Which of the following would NOT expand the money supply?

Selling bonds on the open market

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Monetary Policy

15 termsStudBud Administration74 plays

The Federal Reserve and Economic Stabilization

Flashcards15 cardsFPractice quizPHost liveL

Questions 15

Answers

1
What typically happens to interest rates when the money supply increases?
They fall
They will usually not change
They rise
2
If the Federal Reserve began to sell bonds on the open market...
Interest rates are not related to the money supply
Interest rates should rise
Interest rates would not respond
Interest rates should fall
3
Which group inside the Federal Reserve actually manages the money supply?
The Board of Governors
The Federal Reserve Board
The Federal Advisory Council
The Federal Open Market Committee
4
When the money supply shrinks
Aggregate demand holds steady
Interest rates rise
Interest rates fall
Aggregate demand rises
5
In recessions the central bank will
Increase the money supply
Reduce the money supply
6
The primary role of the Central Bank is to
Regulate the supply of money
Set tax policy
Take deposits and make loans
Lend money to large companies
7
If GDP is rising and unemployment is falling, the Federal Reserve will most likely
Decrease the money supply
Increase the money supply
8
If the Federal Reserve wished to reduce overall aggregate demand they would
Sell bonds on the open market
Buy bonds on the open market
9
Which of the following is the Central Bank of the United States
The Federal Reserve
The Federal Depositor's Insurance Corporation
The Federal Advisory Council
The Federal Open Market Committee
10
In a period of economic contraction, what is the most likely monetary policy?
Increasing reserve requirements on banks
Increasing the discount rate
Selling Treasury bonds on the open market
Buying Treasury bonds on the open market
11
Which of the following would NOT expand the money supply?
Lowering the discount rate
Buying bonds on the open market
Selling bonds on the open market
Lowering reserve requirements
12
Why would the money supply be tightened during economic expansions?
To raise the price level
To reduce the level of unemployment
To control inflation
To prod more spending and increase GDP
13
True or False: Aggregate demand will fall when the money supply falls
False
True
14
If the economy is expanding, the central bank will typically
Increase the money supply
Decrease the money supply
Leave the money supply unchanged
15
What action should the Federal Reserve take in order to encourage higher GDP?
Lower the discount rate
Sell bonds on the open market
Raise taxes
Increase reserve requirements

Monetary Policy Flashcards | StudBud

Monetary Policy

15 termsStudBud Administration74 plays

The Federal Reserve and Economic Stabilization

Flashcards15 cardsFPractice quizPHost liveL

Questions 15

Answers

1
What typically happens to interest rates when the money supply increases?
They fall
They will usually not change
They rise
2
If the Federal Reserve began to sell bonds on the open market...
Interest rates are not related to the money supply
Interest rates should rise
Interest rates would not respond
Interest rates should fall
3
Which group inside the Federal Reserve actually manages the money supply?
The Board of Governors
The Federal Reserve Board
The Federal Advisory Council
The Federal Open Market Committee
4
When the money supply shrinks
Aggregate demand holds steady
Interest rates rise
Interest rates fall
Aggregate demand rises
5
In recessions the central bank will
Increase the money supply
Reduce the money supply
6
The primary role of the Central Bank is to
Regulate the supply of money
Set tax policy
Take deposits and make loans
Lend money to large companies
7
If GDP is rising and unemployment is falling, the Federal Reserve will most likely
Decrease the money supply
Increase the money supply
8
If the Federal Reserve wished to reduce overall aggregate demand they would
Sell bonds on the open market
Buy bonds on the open market
9
Which of the following is the Central Bank of the United States
The Federal Reserve
The Federal Depositor's Insurance Corporation
The Federal Advisory Council
The Federal Open Market Committee
10
In a period of economic contraction, what is the most likely monetary policy?
Increasing reserve requirements on banks
Increasing the discount rate
Selling Treasury bonds on the open market
Buying Treasury bonds on the open market
11
Which of the following would NOT expand the money supply?
Lowering the discount rate
Buying bonds on the open market
Selling bonds on the open market
Lowering reserve requirements
12
Why would the money supply be tightened during economic expansions?
To raise the price level
To reduce the level of unemployment
To control inflation
To prod more spending and increase GDP
13
True or False: Aggregate demand will fall when the money supply falls
False
True
14
If the economy is expanding, the central bank will typically
Increase the money supply
Decrease the money supply
Leave the money supply unchanged
15
What action should the Federal Reserve take in order to encourage higher GDP?
Lower the discount rate
Sell bonds on the open market
Raise taxes
Increase reserve requirements