Monetary & Fiscal Policy

The President and Congress determine:

• monetary policy
• fiscal policy

The Federal Reserve determines:

• Monetary Policy
• Fiscal Policy

Fiscal policy is the President and Congress using what to improve the economy?

• taxes and spending
• controlling the supply of money

Monetary policy is the Federal Reserve using what to help try to improve the economy?

• taxing and spending
• controlling the supply of money

When inflation is a concern, the government should try to:

• speed up the economy
• slow down the economy

When recession is a concern, the government should try to 

• speed up the economy
• slow down the economy

When the economy is too slow (recession), the government should:

• lower taxes, raise spending
• raise taxes, lower spending

When the economy is too fast (inflation), the government should:

• lower taxes, raise spending
• raise taxes, lower spending

When the economy is too slow (recession), the Fed should:

• lower discount rate (interest rate)
• raise discount rate (interest rate)

When the economy is too slow (recession), the Fed should:

• sell government bonds
• buy government bonds