Multiple Choice Questions

Which statement best describes how the Fed responds to recessions?
  • It increases the money supply.
  • Regulations keep prices fair and prevent businesses from establishing monopolies.
  • storing money for banks
  • increased inflation
Which is a function of regulatory agencies?
  • limiting inflation and reducing unemployment
  • It increases the money supply.
  • storing money for banks
  • encouraging business compliance
What is a potential negative effect of an expansionary policy?
  • storing money for banks
  • It increases the money supply.
  • encouraging business compliance
  • increased inflation
Why is the Fed often referred to as a "lender of last resort," or the last lender to turn to in a crisis?
  • Regulations keep prices fair and prevent businesses from establishing monopolies.
  • steer the economy away from recession and toward growth
  • It offers banks financial protection to keep consumers from panicking.
  • It is interest on money held in reserve.
Which best describes what a central bank uses monetary policy to do?
  • It increases the money supply.
  • limiting inflation and reducing unemployment
  • steer the economy away from recession and toward growth
  • Regulations keep prices fair and prevent businesses from establishing monopolies.
In how many cities are Federal Reserve district banks located?
  • 12
  • borrowing.
  • It increases the money supply.
  • increased inflation
Which best describes a central bank's primary goals?
  • storing money for banks
  • steer the economy away from recession and toward growth
  • encouraging business compliance
  • limiting inflation and reducing unemployment
Which statement explains how regulations on prices affect business practices?
  • steer the economy away from recession and toward growth
  • Regulations keep prices fair and prevent businesses from establishing monopolies.
  • It increases the money supply.
  • limiting inflation and reducing unemployment
the Federal Reserve Bank
  • What is a potential negative effect of an expansionary policy?
  • What is the full name of the US central bank, known as the Fed?
  • Which of these is a banking activity of the Fed?
  • Which statement best describes how the Fed responds to recessions?
to set aside or hold for another
  • central bank
  • reserve
  • implement
  • securities
reducing unemployment and maintaining cash flow
  • Which of these is a banking activity of the Fed?
  • Which best describes a central bank's primary goals?
  • Which statement best describes how the Fed responds to recessions?
  • Which best describes what a central bank uses monetary policy to do?
Interest rates will likely decrease.
  • Which best describes what a central bank uses monetary policy to do?
  • Which statement describes how borrowers will most likely benefit when the Fed reduces reserve requirements?
  • Which statement best describes how the Fed responds to recessions?
  • Which statement best describes how the Fed's use of open market operations affects banks?
....liquidity.
  • Economists studying the money supply categorize the status of the money based on....
  • What is a potential negative effect of an expansionary policy?
  • What is the full name of the US central bank, known as the Fed?
  • Which statement best describes how the Fed's use of open market operations affects banks?
It affects banks' liquidity.
  • Which statement describes how borrowers will most likely benefit when the Fed reduces reserve requirements?
  • Which statement best describes how the Fed responds to recessions?
  • Which of these is a banking activity of the Fed?
  • Which statement best describes how the Fed's use of open market operations affects banks?
use to complete a specific action
  • implement
  • reserve
  • securities
  • Which statement describes how borrowers will most likely benefit when the Fed reduces reserve requirements?
steer the economy away from recession and toward growth
  • Which statement describes how borrowers will most likely benefit when the Fed reduces reserve requirements?
  • Which statement best describes how the Fed responds to recessions?
  • Which best describes a central bank's primary goals?
  • Which best describes what a central bank uses monetary policy to do?
storing money for banks
  • Which statement best describes how the Fed responds to recessions?
  • Which best describes a central bank's primary goals?
  • What is the full name of the US central bank, known as the Fed?
  • Which of these is a banking activity of the Fed?
creating monetary policy
  • Which of these is a banking activity of the Fed?
  • Which best describes a central bank's primary role?
  • Which best describes a central bank's primary goals?
  • Which best describes what a central bank uses monetary policy to do?
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Multiple Choice Questions
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