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Questions and Answers
What is the primary purpose of monetary policy?
What is the primary purpose of monetary policy?
- To regulate foreign exchange rates
- To control fiscal policy decisions
- To manage money supply and interest rates (correct)
- To increase government spending
Which institution is responsible for implementing monetary policy in the United States?
Which institution is responsible for implementing monetary policy in the United States?
- U.S. Department of the Treasury
- Federal Reserve Bank (correct)
- Securities and Exchange Commission
- Federal Deposit Insurance Corporation
What type of tools does the Federal Reserve use in monetary policy?
What type of tools does the Federal Reserve use in monetary policy?
- Open market operations and interest rate adjustments (correct)
- Wage restrictions and price controls
- Trade tariffs and subsidies
- Taxation and government spending
How does the Federal Reserve typically respond to inflation using monetary policy?
How does the Federal Reserve typically respond to inflation using monetary policy?
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What effect does increasing the money supply generally have on interest rates?
What effect does increasing the money supply generally have on interest rates?
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