Fiscal and Monetary policy Review

Question 1

The ________ controls monetary policy

Accepted Answer

Fed

Question 2

What happens to unemployment when the government uses expansionary fiscal policy?

Accepted Answer

Unemployment should fall

Question 3

As shift from AS to AS1 could be caused by

Accepted Answer

higher interest rates

Question 4

Debts and obligations to others on a balance sheet are

Accepted Answer

liabilities

Question 5

Raising interest rates can help to slow the ____________ rate

Accepted Answer

inflation

Question 6

What is the difference between supply-side policies and demand-side policies?

Accepted Answer

Supply - make production easier, Demand increase spending

Question 7

This group makes most monetary policy decisions (like changing interest rates)

Accepted Answer

Federal Open Market Committee (FOMC)

Question 8

If the Fed increases interest rates, the money supply will

Accepted Answer

decrease

Question 9

The Fed can buy and sell government ________ to influence the money supply

Accepted Answer

securities

Question 10

Taxing and spending are the tools of ______ policy

Accepted Answer

fiscal

Question 11

A long term effect of increasing the money supply is

Accepted Answer

increased inflation

Question 12

What fiscal policy would the government follow if we were in a recession?

Accepted Answer

Decrease taxing and increase spending

Question 13

When the Fed buys bonds/securities, the money supply will

Accepted Answer

increase

Question 14

Tight money policies will result in

Accepted Answer

increased unemployment

Question 15

What is the difference between deficit and debt?

Accepted Answer

Deficit is spending too much in 1 year, and debt is overall

Question 16

What would a decrease in production costs do to AS?

Accepted Answer

AS would increase and price level would fall

Question 17

Easy money policies will lead to

Accepted Answer

increased inflation

Question 18

A shift from AD to AD1 could be caused by

Accepted Answer

higher consumer saving

Question 19

The _______ is how much banks are required to keep on hand in cash.

Accepted Answer

reserve requirement

Question 20

The ________ controls fiscal policy

Accepted Answer

Government

Question 21

The reserve requirement and interest rates are tools of _______ policy

Accepted Answer

monetary

Question 22

To increase the money supply, interest rates will

Accepted Answer

fall

Question 23

When the Fed sells bonds/securities, the money supply will

Accepted Answer

decrease

Question 24

If consumers save more and spend less, aggregate demand will

Accepted Answer

decrease

Fiscal and Monetary policy Review

Questions 24

Fiscal and Monetary policy Review

Questions 24