Transcript Monetary Policy Practice
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It collects information about each Federal Reserve District and reports on economic conditions to the Board of Governors.
Composed of seven members appointed by the President, it oversees the Federal Reserve System.
It redraws the map of the twelve Federal Reserve Districts every ten years in response to economic changes.
It makes key decisions about interest rates and the growth of the United States money supply.
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fiscal policy easy money policy tight money policy policy lags
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It would cause the money supply to contract.
It would increase the money multiplier.
It would cause the money supply to expand It would have no effect on the money supply.
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As interest rates decrease, demand for money increases.
As interest rates increase, demand for money increases.
Interest rates are determined by demand for money.
Interest rates and demand for money are unrelated.
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A recession has reduced aggregate demand and increased unemployment.
The federal government passes a new budget with a large deficit.
The economy is prosperous with relatively low inflation and low unemployment.
The economy is expanding quickly and inflation is a concern.
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Reduce the discount rate Raise the required amount of reserve Increase the prime rate Reduce the money supply
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Increases Decreases Remains the same Could either increase or decrease
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The discount rate The required reserve ratio The federal tax code Open market operations
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The required reserve ratio The money multiplier Open market operations The discount rate 10
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Establish monetary policy Establish fiscal policy Establish trade policy Balance the federal budget
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10 In a recession When the inflation rate is too high When aggregate demand is too high When the economy is expanding
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The United States Treasury The United States Mint The Federal Reserve System The Securities and Exchange Commission
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To buy bonds To balance the budget To supply cash withdrawals To endure business investment
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The president, Congress, and the Cabinet The Internal Revenue Service and the Office of Management and Budget 12 banks in different regions of the US and the Federal Open Market Committee All banks, savings and loans, and credit unions in the US
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Monetary policy involves the money supply, while fiscal policy involves government taxing and spending decisions Fiscal policy involves the money supply, while monetary policy involves government taxing and spending decisions Fiscal policy involves specific steps taken to carry out the overall monetary policy They are the same
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