Introduction to Macroeconomics 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

Which factor most directly influences how much money consumers are willing to borrow?

A
influencing economic growth
B
influencing unemployment rates
C
changing inflation rates
D
changing interest rates
5

✔ expansionarycontractionary

A
expansionary
B
contractionary
6

state bankcentral bankdistrict bank

A
state bank
B
central bank
C
district bank
7

interest ratessecurities

A
interest rates
B
securities
8

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
9

✔ stabilityinflationrecessions

A
stability
B
inflation
C
recessions
10

Federal Reserve Interest RateLoan Interest RateFederal Funds Rate

A
Federal Reserve Interest Rate
B
Loan Interest Rate
C
Federal Funds Rate
11

Private banksThe ConstitutionThe Federal Reserve Act of 1913

A
Private banks
B
The Constitution
C
The Federal Reserve Act of 1913
12

increasedecreasestay the same

A
increase
B
decrease
C
stay the same
16

The Federal Reserve is the within the United States.

A
state bank
B
central bank
C
district bank
18

established the Federal Reserve system to avoid consumer panics.

A
Private banks
B
The Constitution
C
The Federal Reserve Act of 1913

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