Glendale Community College » Economics » Econ 102 - Principles of Macroeconomics » Winter 2021

Question #1

The Federal Reserve does all of the following except

A. keeps financial system stable

B. prints paper currency

C. conducts open market operations

D. a lender of last resort

Question #2

Bank runs are prevented by

A. open market operations

B. monetary policy

C. the president and congress

D. the Federal Reserve and the FDIC

Question #3

Which of the following is considered contractionary monetary policy?

A. lowering the discount rate

B. lower the reserve requirement

C. buying government bonds

D. selling government bonds

Question #4

When the country is in a recession, the central bank should use _____________________ to stimulate the economy.

A. expansionary fiscal policy

B. contractionary monetary policy

C. rational expectations theory

D. expansionary monetary policy

Question #5

When the Federal Reserve lowers the reserve requirement

A. money supply decreases and interest rates rise

B. money supply decreases and interest rates fall

C. money supply increases and interest rates fall

D. money supply increases and interest rates rise