American Government: Section 4-04 Unit #3 AIR Post-Test L2
Question 3 of 32 | Page 3 of 32
Question 3 (6 points)
The Federal Reserve uses monetary tools to regulate the money supply and maintain growth and stability in the
U. S. economy. One of these tools is the adjustment of the discount rate it charges financial institutions on loans
from the Federal Reserve.
Identify whether each of the Effects stems from increasing or decreasing the discount rate.
Column A
Column B
1
People buy more houses
a Decrease
2
People pay more for loans
b. Increase
3.
Inflation increases
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