Monetary and Fiscal Policy

Monetary policy to get out of recession

Lowering the reserve requirement

Felt government should stay out of economic affairs and allow self interest to run the economy

Thought government should use deficit spending to stabilize and avoid recessions

Monetary policy to reduce inflation

Used to increase demand of consumers, by putting more money in their pockets

If the government wants to help us get out of a recession it should..

Used during inflationary times to tighten up the money supply.

Expansionary policy is

Fiscal Policy deals with

If the government wants to reduce inflation it should

Progressive taxes

Controls the buying and selling of goverment securities

Amount of money the government exceeds in spending beyond what it receives in revenue in 1 year

Contractionary policy is

Government control of $ supply through reserve requirement, discount rates and securities

If inflation is high fiscal policy should be

The amount of money required to STAY in the banks is known as