Monetary Policy: The Federal Reserve

Question 1

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.

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.

Revolt · Accepted Answer

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 4

✔ buysell

Revolt · Accepted Answer

✔ buy

Question 5

decreases✔ increases

Revolt · Accepted Answer

✔ increases

Question 6

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 7

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

Revolt · Accepted Answer

✔ Federal Funds Rate; 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

Monetary Policy: The Federal Reserve Answers

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