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

Question #1

The Federal Reserve does all of the following except

A. a lender of last resort

B. conducts open market operations

C. prints paper currency

D. keeps financial system stable

Question #2

Bank runs are prevented by

A. monetary policy

B. the Federal Reserve and the FDIC

C. the president and congress

D. open market operations

Question #3

Which of the following is considered contractionary monetary policy?

A. lower the reserve requirement

B. buying government bonds

C. lowering the discount rate

D. selling government bonds

Question #4

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

A. rational expectations theory

B. expansionary fiscal policy

C. contractionary monetary policy

D. expansionary monetary policy

Question #5

When the Federal Reserve lowers the reserve requirement

A. money supply decreases and interest rates fall

B. money supply increases and interest rates fall

C. money supply decreases and interest rates rise

D. money supply increases and interest rates rise