Assume that the Consumer Price Index (CPI) is rising too rapidly. Which of the following actions could the Federal Open Market Committee take to combat the inflation?
Raise taxes
Lower the discount rate
Sell bonds/securities
Lower the reserve requirement
The Federal Reserve sees signs of contraction/recession approaching in the economy. Which of the following could the Federal Reserve reasonably do?
Raise interest on reserves
Lower the discount rate
Increase government spending
Sell bonds
The Federal Reserve begins an aggressive bond-buying program. How would the money supply, total spending and real GDP be affected?
The money supply would decrease. Total spending and Real GDP would decrease.
The money supply would increase. Total spending and Real GDP would increase.
The money supply and total spending would decrease. Real GDP would increase.
The money supply and total spending would increase. Real GDP would decrease.
Jay Powell announces that the Federal Open Market Committee will discuss lowering the interest rate that banks must pay the Federal Reserve for loans. Which monetary policy tool are they discussing?
Interest on Reserves
Discount Rate
Required Reserve Ratio
Open Market Operations
The Federal Reserve's monetary policy results in a decline in total spending and a drop in the price level. Which of the following could have been a part of their monetary policy? CHOOSE THE TWO THAT APPLY.