central bank
the bank within a nation is responsible for creating monetary policy
implement
use to complete a specific action
reserve
to set aside or hold for another
securities
a mean of protection for investments
Which statement best describes how the Fed responds to recessions?
It buys more securities.
Which statement describes how borrowers will most likely benefit when the Fed reduces reserve requirements?
Interest rates will likely decrease.
Which best describes a central bank’s primary role?
creating monetary policy
Which best describes a central bank’s primary goals?
reducing unemployment and maintaining cash flow
Which of these is a banking activity of the Fed?
storing money for banks
Which best describes what a central bank uses monetary policy to do?
steer the economy away from recession and toward growth
What is the full name of the US central bank, known as the Fed?
the Federal Reserve Bank
What is a potential negative effect of an expansionary policy?
increased inflation
Economists studying the money supply categorize the status of the money based on….
….liquidity.
Which statement best describes how the Fed’s use of open market operations affects banks?
It affects banks’ liquidity.
x

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