The Federal Reserve System is concerned with which of the following policies?

taxation

housing

fiscal

monetary

To fight inflation, the Federal Reserve sometimes

lowers the discount rate.

raises income taxes.

reduces reserve requirements on checking accounts.

slows the growth of money and credit in the economy.

Which is not a monetary policy tool of the Fed?

open market operations

reserve requirements

the prime rate

the discount rate

Open market operations are carried out

on a daily basis.

at the request of the Board of Governors.

only prior to meetings of the Federal Open Market Committee.

at the request of Congress.

The discount rate is the rate that

Federal Reserve Banks charge banks for very short-term loans.

banks charge other banks for short-term loans.

banks charge businesses that borrow a minimum amount of capital.

the Fed charges the Treasury Department for selling U.S. government securities.

From May 1994 to February 1995, the Fed raised the discount rate four times. This indicates that the Fed was concerned primarily with

recession.

taxation.

inflation.

trade imbalances with European nations.

As a result of the Fed's securities purchases

over time, consumers will most likely find it more difficult to borrow from financial institutions.

the U.S. Treasury must pay for the purchase of these securities.

payment is made to the primary dealer responsible for the transaction.

interest rates will immediately go up.

Which of the following statements is true about the lag between a decision of the Federal Open Market Committee on monetary policy and its impact on the economy?

There is no lag.

It may take over one year for the effect of the policy decision to impact on the economy.

The lag exists for interest rate hikes but not for interest rate declines.

The lag exists for interest rate declines but not for interest rate hikes.

The Fed's goals in making monetary policy include all of the following except:

full employment

stable prices

an inflated currency

moderate economic growth

If the Federal Reserve is concerned that the economy may go into a recession they should

stabilize the money supply.

decrease the growth of money and credit in the economy.

increase the growth of money and credit in the economy.

hold an FOMC meeting.