Unit 3: Macroeconomics Mastery Check

Front

What is the term for the government's action to decrease taxes to help the economy grow?

Back

fiscal policy

Front

What can the government do to slow the economy in order to reduce inflation? Options: lower taxes, raise taxes, spend more

Back

raise taxes

Front

To help the economy grow, the government can: increase spending, decrease spending, lower the minimum wage, raise taxes

Back

increase spending

Front

The action by the FED to adjust the size of the money supply, and to adjust interest rates in order to keep prices down and employment high.

Back

monetary policy

Front

In order to help the economy grow, the FED may____________the reserve requirement, allowing banks to loan more people money so that they spend more

Back

lower

Front

In order to slow the economy, the FED may____________ the reserve requirements and there will be less money to loan out to people.

Back

increase

Front

The amount that all banks have to keep in the reserve and they can't loan out to people

Back

reserve requirement

Front

The interest rate the FED charges banks to borrow money will be lowered to help the economy grow and raised to slow the economy.

Back

discount rate

Front

The manipulation of the money supply in order to influence the cost and the availability of credit is

Back

Monetary Policy

Front

If the Federal Reserve System wanted to stimulate the U.S. economy and reduce unemployment, it would cause interest rates to decrease because low interest rates encourage business growth and expansion.

Back

cause interest rates to decrease because low interest rates encourage business growth and expansion