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

Question #1

The Federal Reserve does all of the following except

A. conducts open market operations

B. prints paper currency

C. a lender of last resort

D. keeps financial system stable

Question #2

Bank runs are prevented by

A. the president and congress

B. the Federal Reserve and the FDIC

C. monetary policy

D. open market operations

Question #3

Which of the following is considered contractionary monetary policy?

A. lowering the discount rate

B. selling government bonds

C. lower the reserve requirement

D. buying government bonds

Question #4

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

A. expansionary monetary policy

B. expansionary fiscal policy

C. contractionary monetary policy

D. rational expectations theory

Question #5

When the Federal Reserve lowers the reserve requirement

A. money supply increases and interest rates fall

B. money supply decreases and interest rates rise

C. money supply decreases and interest rates fall

D. money supply increases and interest rates rise