Fiscal and monetary policy quizlet
[DOC File]CHAPTER 12
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1. Monetary policy has to do with the money supply and interest rates while fiscal policy deals with taxing and spending. 2. The president may appoint the chairman but has no direct authority over Federal Reserve policy. 3. As the chapter relates, we live in a largely free-market system but not an absolute one (mixed economy). 4. In general ...
[DOC File]AP ECONOMICS CHAPTER 19 STUDY GUIDE
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If the application of a monetary rule is designed to shift AD1 to AD3, but because of pessimistic business expectations AD1 only shifts to AD2, then mainstream economists would suggest that the actions to be taken to avoid deflation would be to implement a(n): A) expansionary fiscal policy and a tight money policy.
[DOC File]CHAPTER 15: TEST BANK
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Fiscal policy includes government purchases of goods and services, government taxes, and Federal Reserve decisions about the money supply in the economy. T 10. Supply side policy can include deregulation and cuts in tax rates. F 11. My current purchase of a 10-year old house is part of current GDP. T 12. The price the consumer pays for a gallon of gasoline, including any excise taxes, is ...
Fiscal Policy Practice Test Questions
Federal Reserve Tools Fiscal Policy Tools Discount rate taxing Reserve Requirement spending borrowing One tool is missing from the Federal Reserve’s list of tools. Which would be the term to fill in that third box? a. buy/sell securities. b. Board of Governors. c. Monetary Policy. d. district banks. If the economy is in an inflationary period, what action would Fiscal Policy most likely take ...
[DOC File]CHAPTER 1
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In the early and mid-1980s, what was the primary measure of money that the Fed used in the execution of monetary policy? a. DNFD. b. M2. c. M3. d. M1. ANSWER: d . 35. Which is used as a measure of transactions money? a. DNFD. b. M2. c. M1. d. M3. ANSWER: c . 36. During the late 1980s, which measure gained importance to the Fed? a. M1. b. Large-denomination time deposits. c. Short-term …
[DOCX File]Chapter 10 - Section 1
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Is expansionary fiscal policy always effective at increasing total spending in the economy and decreasing unemployment? Explain. Chapter 13 – Section 2. Monetary Policy. Vocab/ Review questions. Expansionary monetary policy– Contractionary monetary policy - Explain how expansionary monetary policy can lower the unemployment rate. The objective is to keep prices stable. Suppose …
[DOC File]gimmenotes
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Using IS-LM-BP analysis, determine the direction (expansionary or contractionary) of fiscal policy and monetary policy necessary to correct the following situations. Assume that financial capital is not perfectly mobile, but the BP line is flatter than the LM curve. Assume that exchange rates are fixed. a) Full employment and external surplus. b) Full employment and external deficit. c ...
[DOC File]International Economics, 7e (Husted/Melvin)
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C) monetary and fiscal policy are effective. D) fiscal and monetary policy are ineffective. Answer: A 15) Internal balance describes A) equilibrium in the goods market. B) a desired level of trade or capital flows. C) where the IS and BP curve intersect. D) a domestic rate of growth consistent with a low unemployment rate. Answer: D 16) Many economists argue that the sharp reduction in U.S ...
[DOCX File]Chapter 02: Economics: The Framework for Business
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fiscal policy c. investment policy ... In addition to setting the monetary policy, he is responsible for extending banking services to commercial banks. In this scenario, Larry is most likely part of the _____. a. Federal Reserve b. Department of Commerce c. Bureau of Economic Analysis d. U.S. Treasury. ANSWER: a. 32. During an especially difficult year of weakening financial conditions, the ...
[DOC File]Multiple choice questions
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Monetary, Fiscal, and Incomes Policy, and Inflation _____ Central banks in LDCs generally have less effect on expenditure and output than in DCs. Tax revenue as a percentage of GNP in LDCs is about 18 percent compared to 38 percent in DCs. The increase in tax ratios with GNP per capita reflects both the growth in the demand for public services and the capacity to levy and pay taxes. Direct ...
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