Fiscal and Monetary Policy

Front

What is Fiscal Policy?

Back

Actions taken by the government to affect the business cycle

Front

What is Monetary Policy?

Back

Actions taken by the federal reserve to affect the business cycle

Front

Which of the following is not a Fiscal Policy action? Increasing Taxes, Decreasing Taxes, The Federal Reserve Selling Bonds, Increasing Government Spending

Back

The Federal Reserve Selling Bonds

Front

Which of the following is not a Monetary Policy action? Selling Bonds, Required Reserves for Banks, The Federal Reserve Buying Bonds, Decreasing Taxes

Back

Decreasing Taxes

Front

If the economy is experiencing high inflation which combination below would work best to decrease inflation? Options: Increase Taxes, Decrease Government Spending; The Federal Reserve Buying Bonds, The Federal Reserve Selling Bonds; Increase Bank Required Reserves, The Federal Reserve Buying Bonds; Decrease Taxes, Decrease Government Spending

Back

Increase Taxes, Decrease Government Spending

Front

If an economy is experiencing a recession, which action below would work best to get GDP to expand/increase again? Options: Increase Taxes, The Federal Reserve Buying Bonds, Lower Bank Required Reserves, Decrease the Discount Rate

Back

The Federal Reserve Buying Bonds

Front

How much control does the President of the US have over the economy?

Back

Almost none

Front

If the government simultaneously increases taxes and decreases spending, what phase of the business cycle is likely next?

Back

Recession

Front

When the Federal Reserve buys bonds on the open market what is the result?

Back

The economy expands because more cash circulates/ money supply increases

Front

If the Federal Reserve was to increase the Required Reserve Ratio for banks, what would the result be on the economy?

Back

Economic growth would slow or maybe go into recession due to less loanable funds