This quiz works best with JavaScript enabled. Home > Monetary > Policy > Monetary Policy – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary Policy Quiz 8 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Fractional reserve banking system means? A) Banks are required to keep a portion of all deposits on hand, either on deposit withe the Fed or in the vault. B) Our currency needs to be backed up by an allotment of precious metals. C) Credit cards debt can not be greater than the amount of M1. D) None of above. Show Answer Correct Answer: A) Banks are required to keep a portion of all deposits on hand, either on deposit withe the Fed or in the vault. 2. If you want to speed up the economy, the Fed can ..... the money supply by ..... interest rates. A) Increase, decreasing. B) Decrease, increasing. C) Maintain, maintain. D) Increase, increase. Show Answer Correct Answer: A) Increase, decreasing. 3. How many people end up voting on final monetary policy? A) 5. B) 10. C) 12. D) 19. Show Answer Correct Answer: C) 12. 4. Local banks in the 1800s that printed too much money were called A) Central banks. B) Wildcat banks. C) National banks. D) None of above. Show Answer Correct Answer: B) Wildcat banks. 5. QE is when the BofE England purchases from pension funds and banks ..... A) Existing government and corporate bonds. B) New government and corporate bonds. C) Existing government bonds and new corporate bonds. D) None of above. Show Answer Correct Answer: A) Existing government and corporate bonds. 6. Helicopter money is a solution to the liquidity trap. A) Money given to people rather than buying bank assets like QE. B) Reduces taxes. C) Both 1 and 2. D) Less direct than QE. Show Answer Correct Answer: A) Money given to people rather than buying bank assets like QE. 7. This is attained through banking supervision and regulation. A) Financial Stability. B) Price Stability. C) Efficient payments and settlements system. D) Inflation Targeting. Show Answer Correct Answer: A) Financial Stability. 8. Which of the following allows eligible institutions to borrow money from the central bank to meet reserve requirements? A) Discount rate. B) Reserve policy. C) Discount window. D) Inflation targeting. Show Answer Correct Answer: C) Discount window. 9. What is the Federal Funds Rate? A) Interest banks charge to you and I for loans. B) Interest the Fed charges banks for loans. C) Interest banks charge other banks for loans. D) None of above. Show Answer Correct Answer: C) Interest banks charge other banks for loans. 10. Monetary policies the RBA can adopt include all of the following EXCEPT A) Raising the discount rate. B) Buying government bonds. C) Lowering the reserve requirement. D) Raising personal income tax rates. Show Answer Correct Answer: D) Raising personal income tax rates. 11. What are the 3 main responsibilities of the Federal Reserve? A) Reserve requirements, discount rate, open market operations. B) Check clearing, distribution of currency, banks supervision. C) Promote economic growth, stable prices, and control unemployment. D) None of above. Show Answer Correct Answer: C) Promote economic growth, stable prices, and control unemployment. 12. The Federal Reserve's primary policy tools include all of the following except A) Open-market operations. B) Changing the discount rate. C) Setting reserve requirements. D) Borrowing from foreign governments. Show Answer Correct Answer: D) Borrowing from foreign governments. 13. Which type of monetary policy involves increasing the growth of the money supply? A) Expansionary monetary policy. B) Contractionary monetary policy. C) Reserve monetary policy. D) Federal monetary policy. Show Answer Correct Answer: B) Contractionary monetary policy. 14. Actions by the FED that alter the supply and cost of money to achieve stable prices, stable interest rates, and full employment A) Monetary Policy. B) Fiscal Policy. C) Money money. D) Policy policy. Show Answer Correct Answer: A) Monetary Policy. 15. Expansionary Monetary policy moves the A) MS line to the left. B) AD line to the left. C) MD line to the left. D) MS line to the right. Show Answer Correct Answer: D) MS line to the right. 16. As a result of the financial institution crisis of the 1980s, S&Ls are now insured by the A) FSLIC. B) FDIC. C) Fed. D) National Banking System. Show Answer Correct Answer: B) FDIC. 17. Who was the first woman to be chairperson of the Federal Reserve and Secretary of the Treasury? A) Kamala Harris. B) Nancy Pelosi. C) Janet Yellen. D) None of above. Show Answer Correct Answer: C) Janet Yellen. 18. Who is in charge of Monetary policy within the Fed? A) The Central Bank. B) FOMC. C) Board of Governors. D) Member banks. Show Answer Correct Answer: B) FOMC. 19. Everything else held constant, when the federal funds rate is ..... the interest rate paid on reserves, the quantity of reserves demanded rises when the federal funds rate ..... A) Above; rises. B) Above; falls. C) Below; rises. D) Below; falls. Show Answer Correct Answer: B) Above; falls. 20. This monetary policy tool involves the buying and selling of government bonds A) Discount rate. B) Federal funds rate. C) Open market operations. D) Reserve requirement ratio. Show Answer Correct Answer: C) Open market operations. ← PreviousNext →Related QuizzesMonetary QuizzesMonetary Policy Quiz 1Monetary Policy Quiz 2Monetary Policy Quiz 3Monetary Policy Quiz 4Monetary Policy Quiz 5Monetary Policy Quiz 6Monetary Policy Quiz 7Monetary Policy Quiz 9Monetary Policy Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books