Federal Reserve
The Monetary Policy
Functions of the Federal Reserve
Definitions
Other
100

 The number of district Federal Reserve banks in the United States is:

12

100

Making money & credit more widely available to boost economic growth

Loose (expansionary) monetary policy

100
The Federal Reserve serves as a _____ for the government.
Bank
100

 Which is larger, M1 or M2?

M2

100

the amount of interest banks charge on loans to their best business customers

prime rate

200

The Federal Reserve System was originally established to:

ensure a safe and uniform currency

200

The buying/selling of US securities by the Federal Reserve to affect the money supply

open market operations

200

Government efforts to control the economy through the supply of money in circulation to affect the cost and availability of credit

Fiscal Policy

200

when government makes credit expensive by keeping it in short supply in order to slow down the economy

tight (contractionary) monetary policy

200

Is considered to be the "Father of fiscal policy."

John Maynard Keynes

300

The Federal Reserve is responsible for:

monetary policy

300
What is the main purpose of the Monetary Policy?
Supervises and regulates banks and bank holding companies, and provides financial services for banks and the U.S. government.
300

f the Fed was following a loose monetary policy and wanted to follow a similar fiscal policy, which of the following would be a likely fiscal policy response from the US Government?

The Congress would lower taxes and increase government spending

300

a 12-member group of the Federal Reserve system that meets eight times a year to decide how the Fed should control the nation's money supply

Federal Open Market Committee

300

Anything used as a medium of exchange, unit of accounting, and store of value

Money

400

In what year did Congress create the Federal Reserve System?

1913

400
What happens in a contractionary policy?
The monetary policy seeks to reduce the size of the money supply in order to slow inflation.
400

What person is known, more or less, as the “Father of monetary policy”?

Milton Friedman

400

Fed regulations requiring banks to keep a certain percentage of their deposits as cash

reserve requirement

400

The Chairman of the Federal Reserve Board during the entire 1990s was:

Alan Greenspan

500

The method by which a check deposited in one institution is transferred to the issuer's depository institution

Check clearing

500
What does the Federal Reserve use the Monetary Policy to do?
To promote the objectives of maximum employment, stable prices, and moderate long-term interest rates.
500
Give two main functions of the Federal Reserve
Keeps employment stable Keep inflation low Serves as a bank for banks
500

Efforts to control the economy through government policies on taxing and spending

monetary policy

500

The Federal Reserve can affect the money supply by:

changing reserve requirements

lowering interest rates

M
e
n
u