Monetary and Fiscal Policy Tools

Front

What are the tools the government can use to conduct fiscal policy?

Back

Taxation and government spending

Front

Contractionary policy (tight money policy also) fights ______Expansionary policy (including easy money policy) fights _______

Back

Inflation; recession/ unemployment

Front

Discount rate

Back

Rate of interest that the Fed charges banks to borrow money

Front

Which of the following would not count in United States GDP for the current year? Purchasing a used tractor and buying a TV produced in Japan, Paying rent and the government building a new school, Walmart buying new cash registers and sending a domestically produced car to Germany, Buying a pizza from crossroads and government buys new tanks from an American corporation

Back

Purchasing a used tractor and buying a TV produced in Japan

Front

How to conduct expansionary fiscal policy? Options: decrease taxes, increase government spending

Back

decrease taxes, increase government spending

Front

What are the tools the FED can use to conduct monetary policy?

Back

Reserve requirement, Discount rate, Federal funds rate, open market operations

Front

4 ways to conduct tight money policy: Increase reserve requirement, increase discount rate, increase federal funds rate, sell bonds

Back

Increase reserve requirement, increase discount rate, increase federal funds rate, sell bonds

Front

Which of the following is an expansion or period of growth?

Back

D

Front

Which would the Federal Reserve do to fight inflation? Options: decrease taxes, buy bonds, increase taxes, increase the reserve requirement

Back

increase the reserve requirement

Front

A peak in business cycle is indicated by ______ unemployment and _______ output.

Back

lower ; higher