If the economy is experiencing a recession what action can the Fed take to help?

buy gov't bonds on the open market, lower the discount rate

How does the Fed control interest rates?

buying or selling government securities on the open market, raising or lowering the discount rate

The aggregate demand curve could shift because of

increase in government spending

If the economy is experiencing a recession, how can the Fed help?

lower the reserve requirment, buy bonds on the open market

Which of the following are examples of contractionary fiscal policy?

increase taxes; decrease government spending

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Econ - Unit 7 Review Questions

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Government Revenue / Expenditures and Fiscal and Monetary Policies

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Questions 15

Answers

1
Which of the following could cause movement of the aggregate supply curve?
Increase in consumer spending
decrease in government spending
increase in investment spending
resource costs increase
2
Should you go back and play the previous Quizs that are in your Google classroom?
no
YES
3
In conducting monetary policy, the Fed can chose which of the following?
fiscal policy
decrease interest rates
decrease government spending
increase tax cuts
4
To get out of a recession, the government could do which of the following?
Increase investment spending
Monetary policy
Fiscal Policy
Grow the Money Supply
5
Who conducts monetary policy?
only taxpayers
The federal government
The Federal Reserve
the American people
6
The government can enact fiscal policy, which of the following is one their tools?
increase reserve requirement
increase the discount rate
decrease the reserve requirement
increase the tax rate
7
If the economy is experiencing a high inflation which of the following could occur?
increase taxes
increase government spending
cut interest rates
increase the discount rate
8
If the economy is experiencing a recession what action can the Fed take to help?
buy gov't bonds on the open market
Increase taxes
increase government spending
lower the discount rate
9
How does the Fed control interest rates?
raising / lowering taxes
buying or selling government securities on the open market
raising or lowering the discount rate
increasing or decreasing government spending
10
The aggregate demand curve could shift because of
an increase in productivity
increase in government spending
an increase in the cost of resources
an increase in the cost of labor
11
If the economy experiencing high inflation, what action can the Fed take to help?
decrease interest rates
increase government spending
decrease government spending
increase interest rates
12
If the economy is experiencing a recession, how can the Fed help?
increase government spending
increase taxes on consumers
lower the reserve requirment
buy bonds on the open market
13
Which of the following is excluded from monetary policy?
taxes
Open Market operations
Reserve Requirements
the discount rate / window
14
Which of the following are examples of contractionary fiscal policy?
decrease taxes; increase government spending
increase taxes; decrease government spending
increase taxes; increase government spending
decrease taxes; decrease government spending
15
Which of the following phases of the business cycle is the worst?
Peak
Recession
Trough
Expansion

Econ - Unit 7 Review Questions Flashcards | StudBud