Unemployment risen to 9.75% and GDP and CPI are declining. The gov could promote eco growth by

increasing gov spending and lowering tax

Contractionary fiscal policies address inflationary eco problems and intended to:

decrease the amt of money in circulation

during an eco recession the Fed Reserve Banks will most likely react:

easing monetary policy making it easier to lend money

In order to require banks to hold more money as opposed to lending it, the Fed Reserve can

increase the reserve requirement

One disadv of operating a barter system is that trading:

limited by availability and demand

One adv to using a debit card is:

access currency w/o carrying cash

Why did abandoning the gold std result in a decline in the value of the US Dollar?

More currency was able to be printed thus reducing its value

Scenario is most likely to result when the Fed Reserve raises the reserve requirement?

More $ req to be kept in bank res & less avail to be loaned

Medium of exchange, Std measure of value, Store of Value

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Unit 4 Federal Reserve & Monetary & Fiscal Policy

18 termsStudBud Administration897 plays

Economics

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Questions 18

Answers

1
During Expan phase of the bus cycle the gov could implement a contractionary fiscal policy:
create jobs
encourage investment
promote spending
address any inflation issues
2
Unemployment risen to 9.75% and GDP and CPI are declining. The gov could promote eco growth by
decreasing gov spending and increasing tax
decreasing gov spending and lowering tax
increasing gov spending and increasing tax
increasing gov spending and lowering tax
3
Contractionary fiscal policies address inflationary eco problems and intended to:
increase the level of eco investment
extend the expansion phase of the bus cycle
decrease the amt of money in circulation
encourage consumer spending
4
during an eco recession the Fed Reserve Banks will most likely react:
reducing open mkt transaction to reduce the money supply
easing monetary policy making it easier to lend money
tightening monetary policy making lending more difficult
raising the discount rate to affect the monetary supply
5
In order to require banks to hold more money as opposed to lending it, the Fed Reserve can
decrease the discount rate
decrease the federal funds rate
suspend the federal funds rate target
increase the reserve requirement
6
Tax collected by state and local gov but not the federal gov?
Sales tax
Excise tax
Tariffs
Income tax
7
One disadv of operating a barter system is that trading:
taking place w/o currency
carried out in very large markets
conducted w/o consumer protections
limited by availability and demand
8
Nat'l Chartered Bank Members, President appoints chair, 14 yr terms, 12 Districts:
Federal Reserve System
Treasury Dept
Washington, DC
Stock Exchange
9
Money --- intrinsic value, it is worth something in own right rather being a token of fin value
fiat money
commodity money
representative money
monopoly money
10
One way the Fed Reserve can counter unemployment and stimulate spending:
increasing the reserve requirement
tightening monetary policies
selling securities
decreasing the discount rate
11
Money that has value simply bc the gov says it does is:
fiat money
representative money
credit
currency
12
One adv to using a debit card is:
build a strong credit score
purchase goods w/o having any money
repay credit card debts faster
access currency w/o carrying cash
13
One way US can be adversely affected when interest rates are lowered?
Taxes rates may decrease
Price may inflate
Less capital maybe available
Unemployment may increase
14
Why did abandoning the gold std result in a decline in the value of the US Dollar?
More currency was able to be printed thus reducing its value
US did not want to use fiat currency so the value declined
People began hording dollar bills so the value would decline
Bus preferred to be pd w gold thus $ were less valued
15
Scenario is most likely to result when the Fed Reserve raises the reserve requirement?
More $ kept in Fed Res & avail for loans to banks in poor Ec
More $ req to be kept in bank res & less avail to be loaned
More $ is req to be kept in banks and less avail to loan
16
Functions of Money
commodity, representative, fiat
Medium of exchange, Std measure of value, Store of Value
Price of Products
Land, Labor, capital & entrepreneurship
17
Which one is both federal rev source and an expenditure?
Defense spending
Social Security
income taxes
Net interest
18
A decline in the value of US dollar will likely result in an increase
price of products
use of batering
amount of gold reserves
use of credit cards

Unit 4 Federal Reserve & Monetary & Fiscal Policy Flashcards | StudBud