Fiscal & Monetary Policy Review

Businesses are laying-off workers, and the number of businesses failing is at an all-time high.

The Fed uses its monetary tools to increase the money supply in the economy.

Many businesses are closing as millions of workers are unemployed.

Consumer prices are rapidly rising in the nation, demand for products is on the rise

The economy is growing rapidly, home prices are rising sharply, and demand is high.

A major function of the Federal Reserve System is to

Consumer spending is rising rapidly.

The Open Market Committee begins to sell millions of dollars of U.S. Treasury bonds to brokers.

The Fed announces that, effective immediately, it will be lowering the discount rate to banks.

Environmental Protection Act, and the Pure Food and Drug Act are examples of

What primary action is taken by the federal government when inflation is widespread?

The Federal Reserve banks start buying government bonds, and lowers the discount rate.

Federal government announces that there has been a sharp reduction in new home construction.

Factories are enjoying strongest sales ever, and are producing more goods than ever.

The reason federal government would spend more than it collects in taxes during a depression

The Fed issues an order that raises the federal reserve requirements on the nation’s banks.

One action used by the Federal Reserve System to regulate the nation’s money supply.

The unemployment rate is at 25%. What economic policy would you recommend to the president?

Businesses are laying off workers, consumer spending has fallen for the last 4 months in a row

What might motivate Congress to increase taxes and decrease government spending?

During economic recession, the Federal Reserve Board often tries to encourage economic growth

The rate of inflation rises as a result of what in regards to the discount rate.

A tool of the federal government to promote economic growth and stability is its ability to

Many homes are being foreclosed by banks.

People buying houses, is an effect of what in regards to the discount rate?

Which of these is a fiscal policy action government can take during a recession.

The Fed begins to sell government securities and bonds, and increases the discount rate.

The U.S. economy faces an economic depression so the government should

Widespread unemployment in the economy.

Which action could the Federal Reserve take to reduce the problem of a recession?