Fiscal, Limited Monetary, & Ample Monetary Policies

Organize these options into the right categories

Groups:

(a) Fiscal policy tools

,

(b) Limited Monetary tools

,

(c) Ample Monetary Tools

• RRR

• administered rates

• ON RRP

• taxes

• IORB

• government spending

• discount rate

• open market operations

Organize these options into the right categories

Groups:

(a) Expansionary fiscal

,

(b) Contractionary fiscal policy

,

(c) Expansionary Limited Monetary

,

(d) Contractionary Limited Monetary

• lower RRR

• decrease taxes

• decrease govt. spending

• increase RRR

• buy bonds

• lower discount rate

• increase taxes

• increase govt. spending

• sell bonds

• increase discount rate

Organize these options into the right categories

Groups:

(a) Expansionary lmited montary

,

(b) Contractionary limited monetary

,

(c) Expansionary Ample monetary

,

(d) Contractionary Ample monetary

• sell bonds

• lower discount rate

• lower ON RRP

• raise administered rates

• raise ON RRP

• lower RRR

• buy bonds

• raise discount rate

• raise RRR

• lower administered rates

• lower IORB

• raise IORB

Match the following

• high unemployment

• inflation

• high prices

• contractionary policy

• fight inflation

• expansionary policy

• fight recession

• recession

Prices of everyday goods are rising rapidly. The central bank raies interest rates (ample) to cool off consumer borrowing and spending. What economic condition is being described and what policy is best suited to fight it?

• recession, fiscal policy

• inflation, monetary policy

• inflation, fiscal policy

• recession, monetary policy

Unemployment is rising, consumer spending has dropped significantly, and businesses are reducing production. The governmetn is considering increasing infrastructure spending to stimulate demand. What economic condition is beng described and what policy is best suited to fight it?

• inflation, fiscal policy

• recession, monetary policy

• recession, fiscal policy

• inflation, monetary policy

Match the following

• interest rate Fed charges on loans

• Open Market Operations

• sell bonds to Fed and buy back next day

• overnight reverse repurchase agreement (ON RRP)

• Fed pays interest on accounts at Fed

• Discount rate

• portion of deposit banks keep

• Required reserve ratio (RRR)

• buy/sell bonds

• Interest on reserve balances (IORB)

Which graph is this?

• Reserves graph

• Money Market Graph

• AD/AS graph

• Phillips Curve Graph

Which graph is this?

• Reserve graph

• Money Market graph

• AD/AS graph

• Phillips Curve graph

What is the primary difference between ample reserves and monetary reseves in a central banking context?

• ample reserves are foreign assets; monetary reserves are only gold holdings

• ample reserves refer to excess liquidity in the banking system; monetary reserves refer to a central bank's holdings of foreign currency and gold

• monetary reserves are using for lending to consumers; ample reserves are used for government spending

• ample reserves are liabilities; monetary reserves are off-balance sheet assets