The central bank in the United States is called the _____.
answer
Federal Reserve
question
The Federal Reserve offers banking services to which of the following? Select all that apply.
answer
U.S. government
question
Open-market operations involve _____ and _____ securities to influence the money supply.
answer
buying, selling
question
During times of economic growth, people are buying goods and services.
answer
more
question
When a central bank influences the growth of the money supply, it is carrying out _____.
answer
monetary policy
question
The amount of money in the economy is called the _____.
answer
money supply
question
Last year, a music download cost $1.00. This year, it costs $1.30. The download is one of many commonly used goods and services whose prices rose because of _____.
answer
inflation
question
The purchasing power of people with _____ decreases a lot when inflation occurs.
answer
fixed incomes
question
The _____ is a measure of the average change in prices of a market basket of goods and services.
answer
Consumer Price Index
question
When you borrow money, you are charged _____. When you put your money in the bank and save it, you earn _____.
answer
interest, interest
question
_____ is when the government uses government spending and taxes to affect economic performance.
answer
Fiscal policy
question
The Federal Reserve _____ interest rates to encourage economic growth.
answer
lowers
question
Reducing interest rates encourages consumers to _____.
answer
borrow more money
question
In order for people to spend money, they need confidence that they will _____ in the future.
answer
earn more money
question
Select all that apply.
Select the policies that are intended to encourage economic growth.
answer
reducing interest rates
increasing the money supply
question
A $100,000 loan that is set for a 30-year term is:
answer
a long-term loan
question
Suppose the Federal Reserve decides to decrease the money supply in order to lower inflation. In three or four sentences, explain if this is an expansionary or contractionary policy.
answer
What will happen is that diminishing the supply of cash will raise loan costs, in this manner diminish the measure of financial action, specifically venture and customer spending. This will prompt a general abatement popular for products and enterprises, achieving a decline in costs, or all the more normally, a littler increment in costs.
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