BEC Economic Theory Review 10

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Joens1313
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299724
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BEC Economic Theory Review 10
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2015-04-02 00:16:24
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BEC Economic Theory Review 10
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BEC Economic Theory Review 10
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  1. What is a monetary policy?
    a monetary policy is a policy that is intended to control the money supply.
  2. What is the Federal Reserve Board?
    The Federal Reserve Board controls the money supply, supervises the banking system, facilitates check clearing, serves as the federal governments fiscal agent, and holds deposits for member institutions.
  3. The -------------------------- controls the money supply, supervises the banking system, facilitates check clearing, serves as the federal governments fiscal agent, and holds deposits for member institutions.
    The Federal Reserve Board controls the money supply, supervises the banking system, facilitates check clearing, serves as the federal governments fiscal agent, and holds deposits for member institutions.
  4. What are the primary means of monetary control?
    The sale and purchase of government debt
  5. If government debt is sold, what is the effect on the money in circulation?
    Sales decrease the money supply by removing money form circulation.
  6. If government debt is purchased, what is the effect on the money in circulation?
    Purchases increase the money supply by adding money to circulation.
  7. Member banks may barrow money from the FED at a rate known as the -----------------.
    Member banks may barrow money from the FED at a rate known as the discount rate.
  8. The ------------------------ is the percentage of customers deposits that banks must keep.
    The legal reserve is the percentage of customers deposits that banks must keep.
  9. When a minimum down payment is established by the FED on securities, it is called a -------------------------.
    When a minimum down payment is established by the FED on securities, it is called a margin requirement.
  10. When a minimum down payment is established by the FED on securities, it is called a margin requirement.  When this requirement is raised, it ---------------------------------.
    When a minimum down payment is established by the FED on securities, it is called a margin requirement.  When this requirement is raised, it decreases the money supply.
  11. ------------------------ the discount rate encourages borrowing and increase the money supply.
    Lowering the discount rate encourages borrowing and increase the money supply.
  12. -------------------- the discount rate discourages barrowing and decreases the money supply

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