In Its Function of Controlling the Money Supply, the Fed

question 140

Multiple Choice

In its function of controlling the money supply, the Fed does which one of the following?

• A) Controls the money supply.
• B) Clears checks.
• C) Regulates banks.
• D) Holds gold belonging to foreign governments.
• E) All of the above are true.

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Definitions:

Aggregate Demand Curve

A visual diagram that illustrates the connection between the general price level within an economy and the aggregate demand for products and services.

Recessionary Gap

The situation where an economy's actual output is less than its potential output due to economic downturn or recession.

Fiscal Policy

A method used by governments to influence a country's economic activity through taxation and spending decisions aimed at achieving economic goals.

Federal Budget Deficit

The shortfall when a government's expenditures exceed its revenues within a fiscal year.