Title: QUIZ: Monetary Policy (4/4): The Fed in Action -- Economic Lowdown Video Series
Course: Andria Testing FRE2 > Section: Monetary Policy (4/4): The Fed in Action -- Economic Lowdown Video Series

Q: If the FOMC determines that employment or inflation are too low, what kind of policy might it use?
- Expansionary / accommodative
- Contractionary / tighter
A: Expansionary / accommodative

Q: If the FOMC pursues expansionary policy, how will it adjust the federal funds rate target, and the interest on reserves balances rate?
- The FOMC will lower the federal funds rate target range, and the Fed will raise the interest on reserves balances rate. 
- The FOMC will lower the federal funds rate target range, and the Fed will lower the interest on reserves balances rate.
- The FOMC will raise the federal funds rate target range, and the Fed will raise the interest on reserves balances rate.
- The FOMC will raise the federal funds rate target range, and the Fed will lower the interest on reserves balances rate.
A: The FOMC will lower the federal funds rate target range, and the Fed will lower the interest on reserves balances rate.

Q: What is the correct order of events?
- The FOMC adjusts the federal funds rate, the Fed adjusts the interest on reserves balances rate, and arbitrage moves the target range.
- The FOMC adjusts the interest on reserve balances rate, the Fed adjusts the target range, and arbitrage moves the federal funds rate into the target range.
- The FOMC adjusts the target range, the Fed adjusts the federal funds rate, and arbitrage moves the interest on reserve balances into the target range.
- The FOMC adjusts the target range, the Fed adjusts the interest on reserves balances rate, and arbitrage moves the federal funds rate into the target range.
A: The FOMC adjusts the target range, the Fed adjusts the interest on reserves balances rate, and arbitrage moves the federal funds rate into the target range.

Q: If the FOMC thinks the economy is overheating (growing too fast), what kind of policy might it use?
- Expansionary / accommodative
- Contractionary / tighter 
A: Contractionary / tighter 

Q: What is the Fed’s primary tool for steering the federal funds rate into the target range?
- Open market operations
- Reserve requirements
- Discount rate
- Interest on reserve balances
A: Interest on reserve balances