Chapter 15 Assignment Sever 201 7 port Effects of the Federal Reserve The Federal Reserve tries to create a positive economic environment capable of sustaining low inflation, high levels of employment, a balance in international payments, and long-term economic growth using a variety of monetary tools. In the following activity, use the hints to categorize both the effects on money supply and economic activity by the monetary tools used to create each effect. The guardian of the American financial system is the Federal Reserve Board, or "the Fed," as it is commonly called, an independent agency of the federal government established in 1913 to regulate the nation's banking and financial industry. The Federal Reserve Board is the chief economic policy arm of the United States. Working with Congress and the president, the Fed tries to create a positive economic environment capable of sustaining low inflation, high levels of employment, a balance in international payments, and long-term economic growth. Port Read each statement when it appears and place the item in the correct box in the chart on the right. Increase-supply declines Buy-increases supply Rase-decrease supply Plestrict decreasing activity Sellows economic activity Lower-activity Govemment secures Discount rate serve requirements Ella on money supply Effect on economie activity Help Save & Exit 20 points Read each statement when it appears and place the item in the correct box in the chart on the right. eBook Priv References Increase-supply declines Buy-Increases supply Effect on money supply Effect on economic activity Government securities Raise-decrease supply Restrict-decreasing activity Decrease-activity increases Sell-slows economic activity Lower-activity increases Discount rate Reserve requirements Relax-more consumption Credit controls Reset