Fiscal and Monetary Policy

What president focused on banking reforms to help regulate the money supply?

• Kennedy

• Ford

• WIlson

• T. Roosevelt

How does the Federal Reserve reduce swings in the economy?

• Control the ability of the government to spend money.

• Control the ability of banks to lend money.

• Control the ability of the consumer to spend/lend money

• Be able to change the amount of money that can be lent to big business.

What THREE things does the FED do to regulate the economy?

• Change the Reserve Requirement

• Set the Discount Rate

• Dictate the Federal Budget

• Buy and Sell Savings Bonds

True or False: Monetary Policy has limitations.

• True

• False

True or False: Fiscal and Monetary Policies do NOT need to work together.

• True

• False

During the Progressive Era, what role did the federal government take on in the economy?

• Providing public goods such as military defense.

• Ensuring fair competition and promoting public safety.

• Regulating economic activities to protect consumers.

• Redistributing income through a graduated tax system.

What is the objective of contractionary fiscal policy?

• To stimulate economic growth and create more jobs

• To collect more taxes and decrease spending to combat inflation

• To increase government spending and boost aggregate demand.

• 
  To slow down economic growth and reduce inflationary pressures.

What are some examples of public goods provided by the federal government?

• Police and fire protection, sewer systems, public parks.

• National defense, bridges without tolls, public television and radio broadcasts.

• Health and safety standards, equal opportunity protections.

• Bonds, borrowing money, regulating banks and stock market.

Since the 1930's the federal government has assumed a much greater role in the economy. Today, the three primary responsibilities of the government in terms of the economy are...

• Promote max employment

• Promote max production

• Promote max tax distribution

• Fight Inflation

True or False:

Fiscal Policy alone can change the economy instantly.

• True

• False