AnswersIL-EconomicsMonetary Policy: The Federal Reserve

Monetary Policy: The Federal Reserve Answers

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Identify the goals of the central bank when creating monetary policy. Check all that apply.reducing employmentinfluencing the business cyclereducing economic growthencouraging economic growthavoiding periods of time where little credit is available

A
reducing employment
B
influencing the business cycle
C
reducing economic growth
D
encouraging economic growth
E
avoiding periods of time where little credit is available
2
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expansionaryX contractionary

A
expansionary
B
contractionary
3

X expansionary contractionary

A
expansionary
B
contractionary
4

In this scenario, what is the Fed trying to do by increasing interest rates? Check all that apply.

A
decrease the amount of money that banks have to lend
B
increase the money supply for banks
C
reduce the amount of available credit
D
discourage consumer borrowing by increasing interest rates on loans
E
encourage banks to loan more money
5

✔ expansionarycontractionary

A
expansionary
B
contractionary
6

state bankcentral bankdistrict bank

A
state bank
B
central bank
C
district bank

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