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

• open market operations

• administered rates

• taxes

• RRR

• discount rate

• IORB

• ON RRP

• government spending

Organize these options into the right categories

Groups:

(a) Expansionary fiscal

,

(b) Contractionary fiscal policy

,

(c) Expansionary Limited Monetary

,

(d) Contractionary Limited Monetary

• increase discount rate

• increase govt. spending

• increase RRR

• buy bonds

• lower RRR

• decrease taxes

• lower discount rate

• decrease govt. spending

• sell bonds

• increase taxes

Organize these options into the right categories

Groups:

(a) Expansionary lmited montary

,

(b) Contractionary limited monetary

,

(c) Expansionary Ample monetary

,

(d) Contractionary Ample monetary

• sell bonds

• lower discount rate

• raise discount rate

• lower RRR

• raise IORB

• buy bonds

• raise ON RRP

• lower administered rates

• lower ON RRP

• raise RRR

• lower IORB

• raise administered rates

Match the following

• high unemployment

• expansionary policy

• fight inflation

• recession

• high prices

• inflation

• fight recession

• contractionary 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

• sell bonds to Fed and buy back next day

• Required reserve ratio (RRR)

• buy/sell bonds

• overnight reverse repurchase agreement (ON RRP)

• interest rate Fed charges on loans

• Interest on reserve balances (IORB)

• Fed pays interest on accounts at Fed

• Open Market Operations

• portion of deposit banks keep

• Discount rate

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