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. 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. monetary policy

C. open market operations

D. the president and congress

Question #3

Which of the following is considered contractionary monetary policy?

A. lower the reserve requirement

B. lowering the discount rate

C. buying government bonds

D. selling 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. rational expectations theory

D. expansionary monetary 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 rise

C. money supply decreases and interest rates fall

D. money supply increases and interest rates rise