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

• IORB

• open market operations

• taxes

• discount rate

• administered rates

• government spending

• RRR

• ON RRP

Organize these options into the right categories

Groups:

(a) Expansionary fiscal

,

(b) Contractionary fiscal policy

,

(c) Expansionary Limited Monetary

,

(d) Contractionary Limited Monetary

• increase govt. spending

• increase discount rate

• lower RRR

• increase RRR

• decrease taxes

• sell bonds

• increase taxes

• buy bonds

• lower discount rate

• decrease govt. spending

Organize these options into the right categories

Groups:

(a) Expansionary lmited montary

,

(b) Contractionary limited monetary

,

(c) Expansionary Ample monetary

,

(d) Contractionary Ample monetary

• lower IORB

• buy bonds

• lower ON RRP

• raise ON RRP

• raise RRR

• raise discount rate

• lower administered rates

• raise administered rates

• sell bonds

• raise IORB

• lower discount rate

• lower RRR

Match the following

• high unemployment

• expansionary policy

• fight inflation

• inflation

• fight recession

• contractionary policy

• high prices

• recession

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

• Fed pays interest on accounts at Fed

• Open Market Operations

• interest rate Fed charges on loans

• Interest on reserve balances (IORB)

• sell bonds to Fed and buy back next day

• Discount rate

• portion of deposit banks keep

• overnight reverse repurchase agreement (ON RRP)

• buy/sell bonds

• Required reserve ratio (RRR)

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