Fiscal & Monetary Policy

a rise in the cost of goods and services

• inflation
• discount rate
• interest
• monetary policy

The goal of monetary policy is to

• sell bonds

• reduce unemployment

• prevent inflationary and recessionary economic periods

• increase tariffs on foreign countries

"The Fed" refers to the....

• Federal Bureau of Investigation

• Federal Government

• Federal Reserve System/Bank

• Federal Income Tax

The federal government is attempting to encourage spending by consume rs and businesses, a fiscal policy BEST serving this purpose would be

• decreasing taxes
• decreasing government spending
• reducing the investment tax credit
• balancing the budget

If the United States is experiencing inflation, the Fed will likely

• Increase the supply of money in the economy
• Decrease the supply of money in the economy

In a recession, the Fed would likely

• Increase the supply of money in the economy
• Decrease the supply of the money in the economy

Does increasing the money supply cause inflation or deflation?

• Inflation
• Deflation

number of federal reserve district banks?

• 5

• 10

• 12

• 21

Money loses its value when it

• It becomes too plentiful
• becomes too portabale
• is divisible
• is durable

Choose the 2 answers below that are fiscal policy tools of the Federal Government

• Local referendums

• Taxes

• Discount Rate

• Government Spending