Oregon Real Estate | Finance 6 Exam
Questions and Answers with Verified
Solutions | Latest Updated 2026
Fiscal Policy Government spending and taxation
decisions made by Congress.
Monetary Policy Control of money supply and interest
rates by the Federal Reserve.
Federal Reserve (The Fed) Central banking system that establishes
U.S. monetary policy.
Money Supply Total amount of money available in the
economy.
Inflation Increase in general price levels caused
by excess money in circulation.
Tight Money Market High interest rates and reduced
availability of credit.
Disintermediation Flow of funds out of banks to higher-
yield investments.
Fractional Reserve Banking System where banks keep a fraction of
deposits and lend the remainder.
, Reserve Requirements Portion of deposits banks must keep in
reserve.
Effect of Raising Reserve Decreases lending and decreases money
Requirements supply.
Effect of Lowering Reserve Increases lending and increases money
Requirements supply.
Discount Rate Interest rate charged by the Federal
Reserve to member banks.
Federal Funds Rate Interest rate charged by one bank to
another bank for overnight loans.
Effect of Raising Discount Rate Decreases bank borrowing and
decreases money supply.
Effect of Lowering Discount Increases bank borrowing and increases
Rate money supply.
Open Market Operations Buying and selling U.S. Treasury securities
by the Fed.
Federal Open Market Fed committee responsible for open
Committee (FOMC) market operations.
Fed Buys Securities Increases money supply and lowers
interest rates.
Questions and Answers with Verified
Solutions | Latest Updated 2026
Fiscal Policy Government spending and taxation
decisions made by Congress.
Monetary Policy Control of money supply and interest
rates by the Federal Reserve.
Federal Reserve (The Fed) Central banking system that establishes
U.S. monetary policy.
Money Supply Total amount of money available in the
economy.
Inflation Increase in general price levels caused
by excess money in circulation.
Tight Money Market High interest rates and reduced
availability of credit.
Disintermediation Flow of funds out of banks to higher-
yield investments.
Fractional Reserve Banking System where banks keep a fraction of
deposits and lend the remainder.
, Reserve Requirements Portion of deposits banks must keep in
reserve.
Effect of Raising Reserve Decreases lending and decreases money
Requirements supply.
Effect of Lowering Reserve Increases lending and increases money
Requirements supply.
Discount Rate Interest rate charged by the Federal
Reserve to member banks.
Federal Funds Rate Interest rate charged by one bank to
another bank for overnight loans.
Effect of Raising Discount Rate Decreases bank borrowing and
decreases money supply.
Effect of Lowering Discount Increases bank borrowing and increases
Rate money supply.
Open Market Operations Buying and selling U.S. Treasury securities
by the Fed.
Federal Open Market Fed committee responsible for open
Committee (FOMC) market operations.
Fed Buys Securities Increases money supply and lowers
interest rates.
