AP MACRO EXAM REVIEW 2024 |COMPLETE QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS ) A GRADE. Functions of the FED? - ANSWER -supervise/regulate banks, conduct monetary policy, control discount rate Does the FED print money - ANSWER -no Monetary policy - ANSWER -control of the money supply by policymakers in the central bank (FED) Federal Reserve - ANSWER -FED, central bank of the us What do reserve requirements shift - ANSWER -money supply what does lending money to banks (disco unt rate) shift - ANSWER money supply what do open market operations shift - ANSWER -money supply open market operations - ANSWER -buying and selling bonds discount rate - ANSWER -interest charged by the FED to banks who loan money from them fractional reserve banking - ANSWER -banking with a reserve requirement who controls the reserve requirement - ANSWER -the FED federal funds rate (target rate) - ANSWER -the rate banks charge each other for overnight loans, influenced by FED reser ve ratio - ANSWER -fraction of deposits that banks hold as reserves, r are deposits a liability or an asset to banks - ANSWER -liability (bank has to pay that money back to people) are loans a liability or an asset to banks - ANSWER -asset (bank make s money from them) are physical assets a liability or an asset to banks - ANSWER -asset are required reserves a liability or an asset to banks - ANSWER -asset are checkable deposits a liability or an asset to banks - ANSWER liability money mult iplier - ANSWER -the amount of money generated through transactions
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