Chapter 16 Section 4 Quiz

What does monetary policy do?

• It alters the supply of money
• It changes the way that taxes are collected
• It charters new banks
• It mints new coins and prints bills

This is a policy enacted by the Fed to decrease the money supply and contract the economy.

• Inside Lag
• Tight Money Policy
• Easy Money Policy
• Outside Lag

The belief that the money supply is the most important factor in macroeconomic performance.

• Monetarism
• Loose Money Policy
• Strict Money Policy
• Outside lag

What does fiscal policy include?

• changes in interest rates and loan policies
• changes in government spending and taxation
• changes in banking regulations and policies
• changes in monetary policy

This is a policy enacted by the Fed to increase the money supply and expand the economy.

• Tight Money Policy
• Inside Lag
• Outside Lag
• Easy Money Policy

The following monetary policy tools: 1. open market operations: bond sales 2. increasing the discount rate 3. increasing reserve requirements Are considered?

• Expansionary Tools
• Contractionary Tools

In order to expand the economy and fight a recession the Fed can do all of the following except..

• Purchase Government bonds
• Raise taxes
• Decrease the Discount rate
• Decrease Reserve Requirements