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

Question #1

The Federal Reserve does all of the following except

A. prints paper currency

B. keeps financial system stable

C. a lender of last resort

D. conducts open market operations

Question #2

Bank runs are prevented by

A. the Federal Reserve and the FDIC

B. the president and congress

C. open market operations

D. monetary policy

Question #3

Which of the following is considered contractionary monetary policy?

A. lower the reserve requirement

B. lowering the discount rate

C. selling government bonds

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. contractionary monetary policy

C. rational expectations theory

D. expansionary fiscal policy

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 fall

C. money supply increases and interest rates rise

D. money supply decreases and interest rates rise