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. open market operations

C. the president and congress

D. monetary policy

Question #3

Which of the following is considered contractionary monetary policy?

A. lowering the discount rate

B. lower the reserve requirement

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. rational expectations theory

B. contractionary monetary policy

C. expansionary fiscal 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 increases and interest rates rise

D. money supply decreases and interest rates rise