Money Train Multimedia Activity



Money Train

Question 01

Scenario # 1

In scenario 1, the Federal Reserve will lower the Reserve Requirement by reducing the total amount of money which should be keep in reserve by the banks and the amount of excess reserves will increase. When the excess reserve will increase then the economy will grow.

Scenario # 2

In scenario 2, the Federal Reserve raises the Discount Rates, increasing the Interest Rates it charges from the banks when they borrow money from the Federal Reserve. And this increase in the interest rates will lower the economic growth.

Scenario # 3

In scenario 3, the Federal ...