Ch. 14 Practice Flashcard

Front

Fical policy is _____________ or ___________ policy used to keep the economy stable or to assist in time of recession.

Back

spending; taxing

Front

The Federal Reserve Bank ("The Fed") is a system of 12 regional banks which helps determine monetary policy and banking regulation.

Back

True

Front

The Fed can ___________ interest rates to help stop inflation

Back

raise

Front

If the Fed sells government securities, this ____________ the money supply.

Back

increases/expands

Front

Raising or lower the ____________ _____________, or how much cash a bank has to keep on hand, is a tool of monetary policy.

Back

reserve requirement

Front

If the government increases spending or lowers taxes, it is implementing a(n) ________________ _____________ policy

Back

expansionary fiscal

Front

If the government decreases spending or raises taxes, it is implementing a(n) ________________ _____________ policy

Back

contractionary fiscal

Front

If the Fed decreases the money supply, it is implementing a(n) ____________ ________________ policy

Back

contractionary monetary

Front

If the Fed increases the money supply, it is implementing a(n) ____________ ________________ policy

Back

expansionary monetary

Front

Which is NOT an effect of Expansionary Fiscal Policy? Options: Encourage consumer spending and investment, Increase Real GDP, Increase Price Level, Decrease Employment

Back

Decrease Employment