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Monetary Policy Vocabulary
By Stephanie Foy
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Last updated over 6 years ago
7 questions
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Question 1
1.
Which component of the Federal Reserve System holds the most power in regards to day to day monetary policy?
Board of Governors
Federal Open Market Committee (FOMC)
Congress and President
Twelve (12) District Banks
Question 2
2.
Which of the following is the best example of money serving as a medium of exchange?
Allows people to purchase goods and services instead of bartering
Serves as an investment vehicle
Hedges against inflation
Allows merchants to price goods and services according to demand
Question 3
3.
The process by which the Federal Reserve controls the money supply, availability, and cost of money in order to keep the economy stable is
fiscal policy
discount rate
interest rate
monetary policy
Question 4
4.
Regulating the amount of demand deposits that banks must hold back and not loan refers to which tool of monetary policy?
Reserve Requirements
Open Market Operations
Interest on Reserves
Discount Rate
Question 5
5.
The interest charged when financial institutions borrow money directly from the Federal Reserve
Discount Rate
Interest on Reserves
Open Market Operations
Reserve Requirements
Question 6
6.
The buying and selling of government securities/bonds to influence the money supply
Reserve Requirements
Discount Rate
Interest on Reserves
Open Market Operations
Question 7
7.
The rate of return received by banks for their deposits at the Federal Reserve
Reserve Requirements
Discount Rate
Interest on Reserves
Open Market Operations