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

• RRR

• discount rate

• IORB

• ON RRP

• open market operations

• government spending

• administered rates

• taxes

Organize these options into the right categories

Groups:

(a) Expansionary fiscal

,

(b) Contractionary fiscal policy

,

(c) Expansionary Limited Monetary

,

(d) Contractionary Limited Monetary

• decrease govt. spending

• increase RRR

• lower discount rate

• increase taxes

• decrease taxes

• increase govt. spending

• increase discount rate

• lower RRR

• sell bonds

• buy bonds

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 administered rates

• buy bonds

• lower administered rates

• lower RRR

• sell bonds

• raise IORB

• lower discount rate

• raise RRR

• raise ON RRP

• lower ON RRP

• raise discount rate

• lower IORB

Match the following

• fight inflation

• expansionary policy

• fight recession

• recession

• high unemployment

• contractionary policy

• high prices

• inflation

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

• portion of deposit banks keep

• Interest on reserve balances (IORB)

• Fed pays interest on accounts at Fed

• Discount rate

• sell bonds to Fed and buy back next day

• Required reserve ratio (RRR)

• interest rate Fed charges on loans

• Open Market Operations

• buy/sell bonds

• overnight reverse repurchase agreement (ON RRP)

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