Monetary Policy: The Federal Reserve

Question 1

Based on the information presented in the video, what is the main goal of buying and selling government securities?

Revolt · Accepted Answer

to influence the Federal Funds Rate

Question 2

What did you include in your response? Check any that apply.

Revolt · Accepted Answer

The Fed lent money to banks.; The Fed bought securities to lower mortgage rates.; The Fed tried to increase spending by lowering interest rates.

Question 3

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.

Revolt · Accepted Answer

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 4

higher✔ lower

Revolt · Accepted Answer

✔ lower

Question 5

✔ a decreasean increase

Revolt · Accepted Answer

✔ a decrease

Question 6

Choose the best word or phrase from each drop-down menu. Open market operations influence the directly. In order to lower the Federal Funds Rate, the Fed will securities, which the money supply in banks.

Revolt · Accepted Answer

Selection 1: Federal Funds Rate; Selection 2: buy; Selection 3: increases

Question 7

✔ buysell

Revolt · Accepted Answer

✔ buy

Question 8

decreases✔ increases

Revolt · Accepted Answer

✔ increases

Question 9

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.

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.

Question 10

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

Revolt · Accepted Answer

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

Monetary Policy: The Federal Reserve Answers

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