Monetary Policy and the Federal Reserve System Quiz

Interest rates are a tool used by the Federal Reserve to implement monetary policy.

The main goal of expansionary monetary policy is to promote economic growth.

The name of the Federal Reserve's monetary policy-making body is the Federal Open Market Committee (FOMC).

In the United States, there are 12 Federal Reserve districts.

The primary objective of the Federal Reserve's monetary policy is to achieve full employment.

Jerome Powell is the current Chair of the Federal Reserve Board of Governors.

The Federal Reserve Board of Governors is responsible for making key decisions regarding monetary policy in the United States.

The federal funds rate is the interest rate at which banks lend reserves to other banks overnight.

When the Federal Reserve implements contractionary monetary policy, interest rates increase.

Setting fiscal policy is not a function of the Federal Reserve System.

The primary tool used by the Federal Reserve to conduct open market operations is buying and selling government securities.

Lowering reserve requirements is a characteristic of an expansionary monetary policy.

The term used to describe the Federal Reserve's purchase of government securities is open market operations.

When the Federal Reserve sells government securities, it decreases the money supply.

Reserve requirements are a tool used by the Federal Reserve to directly control the money supply.

Exchange rates are not a monetary policy transmission mechanism.

When the Federal Reserve conducts open market operations to sell government securities, bank reserves increase.

The term used to describe the process by which the Federal Reserve alters the money supply through buying or selling government securities is open market operations.