2021 HS + 1104 Monetary and Fiscal Policies Combined

Which of the following is not an example of a policy that encourages economic growth?

• Acting to lower interest rates

• Increasing the amount of money banks have to hold onto in reserve as a protection against losses.

• Increased Government Spending

• Buying Bonds/Securities

Which of the following policies would be used to slow economic growth?

• Selling Government Bonds/Securities

• Increasing Government Spending

• Reducing the amount of money banks have to hold onto in reserve as a protection against losses

• Buying Government Bonds/Securities

What would the political branches of government do to affect a change in interest rates during a recession?

• Raise them

• Lower them

• Keep them the same

• The Political branches have nothing to do with this.

What would The Federal Reserve do to government spending in a recession?

• Raise it

• Lower it

• Keep it the same

• The Federal Reserve has nothing to do with this.

What would the political branches of government do to taxes during a period of high inflation?

• Raise them

• Lower them

• Keep them the same

• The Political branches have nothing to do with this.

Check all of the following actions the government can take that are part of monetary policy.

• Increasing or Reducing the Amount of money banks have to hold onto in reserve as a protection against losses

• Changing government spending

• Changing levels of taxation

• Taking action that results in higher or lower interest rates.

• Buying or Selling of Government Securities/Bonds.

Check all of the following actions the government can take that are part of fiscal policy.

• Increasing or Reducing the Amount of money banks have to hold onto in reserve as a protection against losses

• Changing government spending

• Changing levels of taxation

• Taking action that results in higher or lower interest rates.

• Buying or Selling of Government Securities/Bonds.

This is the government's policy concerning how much money and credit is available in the economy by using the Federal Reserve Bank.

• Fiscal Policy

• Monetary Policy

• Capital Policy

• State Policy

The political branches of government play a large role in setting ______________.

• Fiscal Policy
• Monetary Policy
• The Reserve Requirement
• Open Market Operations

Select all of the following that are true if interest rates were raised.

• The political branches of government feared inflation.

• The Federal Reserve feared inflation.

• The political branches of government feared recession.

• The Federal Reserve feared recession.

• The economy was being slowed down.