Fiscal, Limited Monetary, & Ample Monetary Policies

Organize these options into the right categories

Groups:

(a) Fiscal policy tools

,

(b) Limited Monetary tools

,

(c) Ample Monetary Tools

• ON RRP

• administered rates

• discount rate

• government spending

• taxes

• open market operations

• RRR

• IORB

Organize these options into the right categories

Groups:

(a) Expansionary fiscal

,

(b) Contractionary fiscal policy

,

(c) Expansionary Limited Monetary

,

(d) Contractionary Limited Monetary

• sell bonds

• increase discount rate

• lower RRR

• increase taxes

• decrease taxes

• increase govt. spending

• increase RRR

• buy bonds

• decrease govt. spending

• lower discount rate

Organize these options into the right categories

Groups:

(a) Expansionary lmited montary

,

(b) Contractionary limited monetary

,

(c) Expansionary Ample monetary

,

(d) Contractionary Ample monetary

• raise discount rate

• lower discount rate

• raise ON RRP

• raise IORB

• raise administered rates

• lower RRR

• lower IORB

• lower administered rates

• raise RRR

• sell bonds

• lower ON RRP

• buy bonds

Match the following

• high prices

• contractionary policy

• high unemployment

• inflation

• fight recession

• recession

• fight inflation

• expansionary policy

Prices of everyday goods are rising rapidly. The central bank raies interest rates (ample) to cool off consumer borrowing and spending. What economic condition is being described and what policy is best suited to fight it?

• recession, fiscal policy

• inflation, monetary policy

• inflation, fiscal policy

• recession, monetary policy

Unemployment is rising, consumer spending has dropped significantly, and businesses are reducing production. The governmetn is considering increasing infrastructure spending to stimulate demand. What economic condition is beng described and what policy is best suited to fight it?

• inflation, fiscal policy

• recession, monetary policy

• recession, fiscal policy

• inflation, monetary policy

Match the following

• buy/sell bonds

• Discount rate

• portion of deposit banks keep

• Required reserve ratio (RRR)

• interest rate Fed charges on loans

• Open Market Operations

• Fed pays interest on accounts at Fed

• overnight reverse repurchase agreement (ON RRP)

• sell bonds to Fed and buy back next day

• Interest on reserve balances (IORB)

Which graph is this?

• Reserves graph

• Money Market Graph

• AD/AS graph

• Phillips Curve Graph

Which graph is this?

• Reserve graph

• Money Market graph

• AD/AS graph

• Phillips Curve graph

What is the primary difference between ample reserves and monetary reseves in a central banking context?

• ample reserves are foreign assets; monetary reserves are only gold holdings

• ample reserves refer to excess liquidity in the banking system; monetary reserves refer to a central bank's holdings of foreign currency and gold

• monetary reserves are using for lending to consumers; ample reserves are used for government spending

• ample reserves are liabilities; monetary reserves are off-balance sheet assets