Title: QUIZ: Monetary Policy (1/4): The Fed and the Dual Mandate -- Economic Lowdown Video Series
Course: Recommended Resources for AP Macro from FRE > Section: Unit 4: Financial Sector

Q: What two main goals has Congress given the Federal Reserve System?
- Maximum prices and employment stability
- Maximum stock market values and economic stability
- Maximum economic growth and employment stability
- Maximum employment and price stability
A: Maximum employment and price stability

Q: What is the FOMC’s target for the federal funds rate?
- Average 3 percent over time
- No higher than 2 percent
- Average 2 percent over time
- No inflation, in other words, 0 percent
A: Average 2 percent over time

Q: How many regularly scheduled FOMC meetings are there per year?
- 12
- 10
- 8
- 6
A: 8

Q: To conduct monetary policy, the FOMC sets a target range for which important rate?
- Interest on reserve balances rate
- Federal funds rate
- Discount rate
- Prime rate
A: Federal funds rate

Q: How can the FOMC adjust policy if it thinks economy is overheating, with inflation rising above its price stability target?
- Raise the federal funds rate target range
- Lower the federal funds rate target range
- Lower the inflation rate
- Raise the unemployment rate
A: Raise the federal funds rate target range

Q: How can the FOMC adjust policy if it thinks the economy is weakening, with employment falling below its maximum level?
- Raise the federal funds rate target range
- Lower the federal funds rate target range
- Raise the inflation rate
- Lower the unemployment rate
A: Lower the federal funds rate target range

Q: How does a lower federal funds rate transmit to achieving the dual mandate?
- It will encourage other interest rates to rise, and result in less spending and more saving by households and businesses.
- It will encourage other interest rates to fall, and result in more spending and less saving by households and businesses.
- It will encourage other interest rates to rise, and result in more spending and more saving by households and businesses.
- It will encourage other interest rates to fall, and result in less spending and more saving by households and businesses.
A: It will encourage other interest rates to fall, and result in more spending and less saving by households and businesses.

Q: How does a higher federal funds rate transmit to achieving the dual mandate?
- It will encourage other interest rates to rise, and result in less spending and more saving by households and businesses. 
- It will encourage other interest rates to fall, and result in more spending and more saving by households and businesses.
- It will encourage other interest rates to rise, and result in more spending and more saving by households and businesses.
- It will encourage other interest rates to fall, and result in less spending and more saving by households and businesses.
A: It will encourage other interest rates to rise, and result in less spending and more saving by households and businesses.