1.Which event involves a function of the Federal Reserve System?

To increase employment, the Fed channels currency into an ambitious space-exploration program.

To increase national security, the Fed extends loans to technology development companies.

To promote economic growth, the Fed lifts home-loan restrictions on people with student-loan debt.

To promote price stability, the Fed breaks up a monopolistic international corporation.

2.Through which tool does the Federal Reserve affect money available for banks to loan?

Discount rate

Money multiplier

Open-market operations

Reserve requirement

3.Which of the following actions would the Federal Reserve most likely take during an economic recession?

Increase reserve requirement

Raise interest rates

Lower discount rate

Sell government securities

4.Which of the following actions would the Federal Reserve most likely take to rein in spiraling inflation?

Generate more money

Increase reserve requirement

Lower the discount rate

Buy of government securities

5.Which of the following actions would the Federal Reserve most likely take to reduce unemployment?

Raise discount rate

Increase reserve requirement

Restrict money supply

Buy government securities