04.04 The Feds Toolbox Quiz – Flashcards

Through which tool does the Federal Reserve affect money available for banks to loan? A. Discount rate B. Money multiplier C. Open-market operations D. Reserve requirement

Which tool does the Federal Reserve use to control monetary policy through bank borrowing? A. Discount rate B. Money creation C. Open-market operations D. Reserve requirement

Which of the following actions would the Federal Reserve most likely take during an economic recession? A. Increase reserve requirement B. Raise interest rates C. Lower discount rate D. Sell government securities

Which of the following actions would the Federal Reserve most likely take to reduce unemployment? A. Raise discount rate B. Increase reserve requirement C. Restrict money supply D. Buy government securities

Which of the following actions would the Federal Reserve most likely take to rein in spiraling inflation? A. Generate more money B. Increase reserve requirement C. Lower the discount rate D. Buy of government securities