Title: QUIZ: Stagflation in the 1970s -- The Federal Reserve and You
Course: Kelly's Copy-Export Course > Section: Stagflation in the 1970s -- The Federal Reserve and You

Q: Inflation occurs when the prices of __________ and __________ across the _______________ go up.
- stocks; services; market
- goods; stocks; economy
- services; capital; market
- goods; services; economy
A: goods; services; economy

Q: When there is inflation, high unemployment, and slow economic growth, it is called
- stagflation.
- a depression.
- hyperinflation.
- a monetary slide.
A: stagflation.

Q: Monetary policy is described as “too loose” when the ____________ is growing faster than the economy.
- money supply
- national GDP
- stock market
- interest rate
A: money supply

Q: High inflation, along with other shocks to the economy, contributed to a severe recession in the 1970s, which in turn led to high ___________________.
- borrowing
- employment
- unemployment
- economic growth
A: unemployment

Q: In order to get inflation under control, Chairman Volcker of the Federal Reserve decided to
- lower the federal funds rate.
- raise the federal funds rate.
- lower the tax rate.
- raise the tax rate.
A: raise the federal funds rate.

Q: The purpose of the Humphrey-Hawkins Act of 1978 was to make the Federal Reserve
- less independent and isolated.
- more transparent and accountable.
- less dependent on input from bankers.
- more responsive to concerns from the public.
A: more transparent and accountable.

Q: Federal Reserve independence is important because it ensures monetary policy is conducted without influence from _______________.
- banks
- politics
- markets
- individual investors
A: politics

Q: One of the reasons the 1970s suffered a prolonged period of high inflation was that the public
- expected high inflation.
- did not expect high inflation.
- expected high unemployment.
- did not think about the effects of inflation.
A: expected high inflation.