1. Which of the following is a method for the Federal Reserve to control the supply of money?
A. Buying or selling U.S. government bonds
B. Setting the discount rate, the interest rate at which banks can borrow from the Federal Reserve
C. Setting the reserve requirement
D. All these choices
2. Open-market operations refer to the Federal Reserve:
A. Buying and selling U.S. government bonds
B. Lowering the reserve requirement
C. Purchasing foreign currency in international markets
D. Raising the discount rate
3. What determines the weights for calculating the Consumer Price Index?
A. Each good and service is weighted equally.
B. The weights reflect the quantities purchased by a typical household.
C. The weights for each good and service are selected randomly.
D. Each good and service is weighted according to its price.