Monetary Policy Video Exit Ticket

What is the primary function of monetary policy?

• Government decisions on spending and taxation.

• A central bank or regulatory agency changing the money supply to achieve economic objectives.

• Individual consumers making investment choices.

• International agreements to regulate global trade.

What is the main role of banks in the economy?

• To print and distribute currency.

• To regulate international trade.

• To link borrowers with lenders.

• To set government tax rates.

How do high interest rates generally affect consumer spending on big-ticket items and the overall GDP?

• Consumer spending increases, and GDP increases.

• Consumer spending decreases, and GDP falls.

• Both consumer spending and GDP remain unchanged.

• Consumer spending increases, but GDP falls.

What is the immediate effect of expansionary monetary policy on the money supply and interest rates?

• Decreases the money supply and raises interest rates.

• Increases the money supply and lowers interest rates.

• Decreases the money supply and lowers interest rates.

• Increases the money supply and raises interest rates.