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. the Federal Reserve and the FDIC

B. open market operations

C. the president and congress

D. monetary policy

Question #3

Which of the following is considered contractionary monetary policy?

A. selling government bonds

B. lowering the discount rate

C. buying government bonds

D. lower the reserve requirement

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. expansionary monetary policy

D. rational expectations theory

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 rise

D. money supply increases and interest rates fall