The Fed: Interest Rates and the Economy Quiz

Question 1

When the Fed increases interest rates, what happens to borrowing?

A It remains unchanged

B It becomes cheaper

C It becomes more expensive

D It is banned

Question 2

The Federal Reserve influences the economy primarily by controlling what?

A Individual bank branch hours

B Consumer stock portfolios

C Import/export quotas

D The money supply and interest rates

Question 3

What is a main goal of the Federal Reserve?

A Increasing personal consumer debt

B High stock market volatility

C Stable prices and maximum employment

D Reducing taxes on corporations

Question 4

Lowering interest rates is usually done to accomplish what?

A Reduce the total money supply

B Stimulate economic growth

C Stop people from spending money

D Increase the cost of business loans

Question 5

If inflation is too high, what does the Fed typically do?

A Lower interest rates

B Raise interest rates

C Ignore the trends

D Print more cash for citizens

Questions