Monetary policy

High reserve requirements 

• lower the money supply
• increase the money supply

Low reserve requirements 

• lower the money supply
• increase the money supply

Quantitative easing: Selling bonds

• increases money supply

• decreases money supply

Quantitative easing: Buying bonds

• increases money supply

• decreases money supply

Which of the following scenarios would cause the nation’s money supply to increase?

• Decreasing government spending
• Lowering interest rates
• Raising interest rates
• Selling bonds to investors

A contractionary policy means that the central bank is attempting to

• increase the size of the nation's money supply

• decrease the size of the nation's money supply

Which policy would help fight inflation?

• Expansionary

• Contractionary

Which policy would help fight unemployment?

• Expansionary

• Contractionary

Based on the sales retail pattern, what do you think the government will do? Check all that applies (more than one answer)

• Raise Interest rates

• Lower Interest rates

• More Quantitative easing (buy bonds)

• Less Quantitative easing (sell bonds)

Based on the unemployment trend shown here, what do you think the government will do? Check all that applies (more than one answer)

• Raise Interest rates

• Lower Interest rates

• More Quantitative easing (buy bonds)

• Less Quantitative easing (sell bonds)