Monetary Policy: The Federal Reserve

Question 1

Which best describes a central bank's primary role?

Revolt · Accepted Answer

creating monetary policy

Question 2

[BLANK]

Revolt · Accepted Answer

Contractionary

Question 3

Which statement best describes how the Fed responds to recessions?

Revolt · Accepted Answer

It increases the money supply.

Question 4

most likely

Revolt · Accepted Answer

Interest rates will decrease.

Question 5

Why does the Fed pay interest to banks?

Revolt · Accepted Answer

It is interest on money held in reserve.

Question 6

When the Fed adjusts its interest rate, it directly influences consumer

Revolt · Accepted Answer

borrowing.

Question 7

In how many cities are Federal Reserve district banks located?

Revolt · Accepted Answer

12

Question 8

best

Revolt · Accepted Answer

limiting inflation and reducing unemployment

Question 9

Which best describes what a central bank uses monetary policy to do?

Revolt · Accepted Answer

steer the economy away from recession and toward growth

Question 10

Which of these is a banking activity of the Fed?

Revolt · Accepted Answer

storing money for banks

Monetary Policy: The Federal Reserve Answers