Policy Options Review

Fiscal Policy: The economy is in a economic boom and low unemployment and high consumer spending.

The Fed. Govt. should do what to the spending levels to slow the economy?

• Increase

• Decrease

Monetary Policy: The economy has rising prices and strong demand for consumer goods.

The Fed. Reserve should do what to the discount rate to lower inflation?

• Increase

• Decrease

Monetary Policy: The economy is in a recession has weak housing prices and low demand for consumer goods.

The Fed. Reserve should do what to the discount rate to lower unemployment?

• Increase

• Decrease

Fiscal Policy: The economy is in a economic boom and low unemployment and growing inflation.

The Fed. Govt. should do what to the tax rate to slow the economy?

• Increase

• Decrease

Monetary Policy: The economy is expanding rapidly and high demand for consumer goods.

The Fed. Reserve should do what to the reserve requirements to lower inflation?

• Increase

• Decrease

Monetary Policy: The economy is in a economic depression and high unemployment.

The Fed. Reserve should do what to the reserve requirements to expand the economy?

• Increase

• Decrease

Fiscal Policy: The economy is in a economic depression and high unemployment.

The Fed. Govt. should do what to the tax rate to expand the economy?

• Increase

• Decrease

Monetary Policy: The economy is in a economic depression and high unemployment.

The Fed. Reserve should buy or sell bonds using Open Market Operations?

• Buy (increase the money supply, makes borrowing affordable)

• Sell (decrease money supply, makes borrowing expensive)

Fiscal Policy: The economy is in a economic depression and high unemployment.

The Fed. Govt. should do what to the spending levels to expand the economy?

• Increase

• Decrease

Monetary Policy: The economy is in an economic boom and low unemployment.

The Fed. Reserve should buy or sell bonds using Open Market Operations?

• Buy (increase money supply, makes borrowing affordable)

• Sell (decrease money supply, makes borrowing expensive)