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 Federal Reserve and the FDIC

B. open market operations

C. monetary policy

D. the president and congress

Question #3

Which of the following is considered contractionary monetary policy?

A. lower the reserve requirement

B. selling government bonds

C. lowering the discount rate

D. buying government bonds

Question #4

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

A. contractionary monetary policy

B. expansionary fiscal policy

C. expansionary 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 increases and interest rates rise

C. money supply decreases and interest rates rise

D. money supply decreases and interest rates fall