Fiscal and monetary policy

Taxes and Spending

• Fiscal Policy

• Monetary Policy

Money Supply and Interest Rates

• Fiscal Policy

• Monetary Policy

What is the goal of expansionary fiscal policy?

• Decrease government spending

• Increase government spending

• Lower inflation

• Decrease individual spending

If the government wants to foster economic expansion, they should:

• Decrease spending and raise taxes

• Decrease spending & raise interest rates

• Increase spending & cut taxes

• Increase spending and raise taxes

What impact would cutting the discount rate have?

• Decreased borrowing & spending

• Increased borrowing & spending

• It would foster economic contraction

• Less money in circulation

Who is in control of Fiscal policy?

• Congress (w/ input from Pres)

• Federal Reserve

• The American People

• Wallstreet

If the Fed lowers the reserve requirement, there is more money in:

• The reserve

• Banks

• Foreign countries

Lowering the reserve requirement would foster

• Economic expansion

• Economic contraction

• More saving

If the Open Market Committee wants to foster economic expansion, they should:

• Buy Bonds/Securities

• Sell Bonds/Securities

• Print more $

• Raise Taxes

To control inflation, the Open Market Committee should:

• Buy bonds/securities

• Sell bonds/securities

• Cut taxes

• Print more money