Only Fiscal & Monetary Policy

What happens to the money supply when the Fed raises reserve requirements?

• Expands
• Contracts

What happens to the money supply when the Fed lowers the discount rate?

• Expands
• Contracts

Which monetary policy will help the economy recover from a recession?

• lower reserve requirements
• raise reserve requirements

Which would the government do to create more economic growth?

• increase government spending
• cut government spending

Which of the following will most likely create an “expansion” to occur in the economy.

• cutting taxes

• contractionary fiscal policy

• cutting government spending

• increasing the discount rate

Which of the following will most likely create a “contraction” to occur in the economy.

• cutting government spending

• expansionary fiscal policy

• lowering the discount rate

• the Federal Reserve buying bonds

Fiscal policy aims to influence the economic activity through the use of

• money supply and interest rate.

• exchange rate.

• government spending and taxation.

• direct and indirect taxation.

Which would encourage economic growth?

• raising reserve requirements

• lowering reserve requirements?

Which would lead to more economic growth?

• the government raises taxes

• the government cuts taxes

Which performs "fiscal policy"?

• The Federal Reserve Bank

• The President and Congress