Monetary Policy Quiz 1 (25 MCQs)

Quiz Instructions:

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1. Federal Reserve Board of Governors members serve _____ terms to help insulate them from political influence.

2. Which is untrue with regards to LIBOR

3. If the economy is experiencing rapidly rising prices (high inflation) the Federal Reserve could limit growth in the money supply by:

4. Which recent president favored supply-side economics?

5. Discount policy affects the money supply by affecting the volume of _____ and the _____

6. What are the objects that have value, that can be exchanged for something else of value?

7. What money characteristic is being met, by the appearance of the USA currency?

8. During an inflation period Central Banks will use

9. Which of the following is NOT an example of money, as defined by M1?

10. When bad storms slow the check-clearing process, float tends to _____ causing the Fed to initiate defensive open market _____

11. The Federal Funds Rate is:

12. If the economy is suffering from a recessionary gap, the Fed should conduct _____ monetary policy by _____ the money supply.

13. Monetary policy is designed by

14. What does NOT happen when the FED alters the Money Supply?

15. If the RR is 10%, the money multiplier will be

16. Which decision making body in the Federal Reserve meets 8 times a year to determine monetary policy?

17. What is the amount of money held within the FED & circulated through the economy?

18. If the reserve requirement is 5%, what is the excess reserves on a deposit of $ 5, 000? what is the money multiplier?

19. Money that has no other use then currency is known as

20. Who controls the Money Supply?

21. What term is used to describe an increase in the general price of goods?

22. The rate banks charge other banks for a loan

23. Money that banks do not lend out, and keep in Reserve are effectively not part of the:

24. How many governors are on the Board of Governors for the Fed?

25. The tool used the most by the Federal Reserve is