Fiscal and Monetary Policy

When there is high unemployment / negative GDP, the Federal Reserve would want to

• buy bonds from banks

• increase interest rates

• decrease government spending

• sell bonds to banks

This is an example of: "In February, lawmakers set themselves up to reach a more permanent spending agreement by the end of March. Congress agreed to increases to domestic and defense spending over the next two years, raising funding for domestic programs by $128 billion and hiking defense budgets by $160 billion."

• Monetary policy

• Fiscal policy

• Trade policy

• Regulatory policy

Raising the discount rate will reduce

• inflation

• unemployment

• consumer spending

• economic growth

If the economy was going into a recession, what would the Federal government do with taxes?

• Increase them

• Decrease them

• Maintain them

• Eliminate them

When there is high unemployment / negative GDP, the Federal Reserve would want to

• lower the reserve requirement

• increase interest rates

• raise the reserve requirement

• sell government bonds

Inflation in the US just hit 15%. The US government should ....

• increase taxes to slow spending

• decrease interest rates to encourage borrowing

• increase government spending to boost the economy

• reduce taxes to stimulate growth

The U.S. Federal Reserve is almost certain to hike interest rates Wednesday to the highest level in a decade: 1.5 to 1.75 percent.

What is this an example of?

• Fiscal policy

• Monetary policy

• Trade policy

• Regulatory policy

If the United States is experiencing inflation, the Fed will likely

• Increase the supply of money in the economy

• Decrease the supply of money in the economy

• Maintain the current supply of money

• Implement tax cuts

The goal of monetary policy is to

• promote economic growth

• prevent inflationary and recessionary economic periods

• increase government spending

• reduce unemployment rates

a rise in the cost of goods and services

• deflation

• inflation

• recession

• devaluation