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Price Stability in Monetary Policy: Definition & Overview

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Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

What's the best explanation of price stability?

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1. Who sets monetary policy in the United States?

2. If the Federal Reserve buys or sells federal securities, what policy tool is it utilizing?

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About This Quiz & Worksheet

Our quiz and worksheet will help you discover how much you know about price stability in monetary policy. To do well on the quiz, you'll need to know about the discount rate and how monetary policy in the U.S. is set.

Quiz & Worksheet Goals

These tools will check your knowledge about:

  • Definition of price stability
  • Who sets monetary policy in the United States
  • The policy tool used when the Federal Reserve buys or sells federal securities
  • What happens to prices when the money supply is increased
  • The discount rate

Skills practiced

Practice these skills with the worksheet and quiz:

  • Reading comprehension - ensure that you draw the most important information from the related price stability in monetary policy lesson
  • Interpreting information - verify that you can read information regarding who sets monetary policy and interpret it correctly
  • Knowledge application - use your knowledge to answer questions about a policy tool used for buying and selling federal securities

Additional Learning

To learn more about these types of governmental decisions, review the lesson called Price Stability in Monetary Policy: Definition & Overview to meet the following objectives:

  • Define monetary policy and monetary equilibrium
  • Explain the connection between open-market operations and price
  • Identify reserve requirements
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