Monetary Policy: The Federal Reserve

Question 1

unemployment✔ inflationstagflation

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inflation

Question 2

Free Banking Act✔ National Banking ActFederal Reserve Act

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National Banking Act

Question 3

Depression of 1865Panic of 1893✔ Panic of 1907

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Panic of 1907

Question 4

What economic challenge did the newly formed American federal government face? [___]

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inflation

Question 5

Which act created nationally chartered banks and circulated notes backed by the federal government? [___]

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National Banking Act

Question 6

What economic event led to the creation of the Federal Reserve? [___]

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Panic of 1907

Question 7

Choose the best word or phrase from each drop-down menu.

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Open market operations influence the directly.: Federal Funds Rate; In order to lower the Federal Funds Rate, the Fed will securities, which the money supply in banks.: buy; In order to lower the Federal Funds Rate, the Fed will securities, which the money supply in banks.: increases

Question 8

Choose the best word or phrase from each drop-down menu. The Federal Reserve increases the money supply when it is trying to encourage the economy to . Consumers are more willing to spend using credit when the money supply is higher because interest rates are . One major positive effect of increasing the money supply is in the unemployment rate.

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grow; The Federal Reserve increases the money supply when it is trying to encourage the economy to .: grow; Consumers are more willing to spend using credit when the money supply is higher because interest rates are .: lower; One major positive effect of increasing the money supply is in the unemployment rate.: a decrease

Question 9

Choose the best word or phrase from each drop-down menu.

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✔ grow; The Federal Reserve increases the money supply when it is trying to encourage the economy to .: grow; Consumers are more willing to spend using credit when the money supply is higher because interest rates are .: lower; One major positive effect of increasing the money supply is in the unemployment rate.: a decrease

Question 10

Based on the information presented in the video, which of the following is likely to occur as a result of the Fed decreasing the money supply? Check all that apply.Employers will bring on large numbers of new employees.The inflation rate will stop growing or decrease.Consumers will spend less money, causing an economic slowdown.Prices for durable goods will increase dramatically.The unemployment rate may rise.

Revolt · Accepted Answer

The inflation rate will stop growing or decrease.; Consumers will spend less money, causing an economic slowdown.; The unemployment rate may rise.

Monetary Policy: The Federal Reserve Answers

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