Match each tool with the appropriate policy decrease the reserve ratio increase taxes sell bonds increase government spending decrease the money supply and increase interest rates Deficit spending (lower taxes & increase spending) decrease the discount rate : Expansionary Fiscal Policy :: Contractionary Fiscal Policy : Expansionary Monetary Policy : Contractionary Monetary Policy

Match each tool with the appropriate policy decrease the reserve ratio increase taxes sell bonds increase government spending decrease the money supply and increase interest rates Deficit spending (lower taxes & increase spending) decrease the discount rate : Expansionary Fiscal Policy :: Contractionary Fiscal Policy : Expansionary Monetary Policy : Contractionary Monetary Policy

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Fiscal policy is conducted by the U.S. Treasury the U.S. Mint the federal government the Federal Reserve bank and involves government spending and taxes. quantitative easing. printing money. open market operations.
Start with a brief introduction that explains use of Government policy to control the economy. When is it appropriate to use monetary and fiscal policy to stimulate or stabilize the economy? Look at both. When is it inappropriate to use monetary and fiscal policy to stimulate or stabilize the economy? Look at both. What specific fiscal policy tools would you use to stimulate aggregate demand and how? What specific monetary policy tools would you use to stimulate aggregate demand and how? What is your conclusion, should policymakers use the monetary and or fiscal policy, or a combination of both, to stimulate aggregate demand? Explain your reasoning.
In the most recent FOMC meeting, the Federal Reserve increased the Federal Funds rate. By doing this, this suggests the Federal Reserve: a is willing to sacrifice jobs to keep prices stable b is willing to sacrifice higher prices to save jobs c believes the Federal Funds rate is not important d is trying to counter fiscal policy actions
if the government budget deficit equals $240 billion and the money supply increases by $100 billion, how much must the government borrow
The rational expectations theory suggests that as the public learns more about the effects of fiscal and monetary policy, in the pursuit of their own self interest they take actions that make Group of answer choices monetary policy more powerful than fiscal policy. fiscal policy more powerful than monetary policy. fiscal and monetary policy ineffective in achieving their stated aims. fiscal and monetary policy effective in achieving their stated aims.
Determine whether the following items are examples of expansionary fiscal policy, contractionary fiscal policy, expansionary monetary policy or contractionary monetary policy as they affect the aggregate demand of an economy. 1. A Significant treasury bond buyback *a. Expansionary fiscal policyb. Contractionary fiscal policyc. Expansionary monetary policyd. Contractionary monetary policy 2. Issuance of new treasury bonds at a higher interest rate *a. Expansionary fiscal policyb. Contractionary fiscal policyc. Expansionary monetary policyd. Contractionary monetary policy
The 'automatic mechanism' can best be described as using fiscal or monetary policies to stabilize the economy when it is not at potential. how the economy returns to potential GDP without any policy action. the result of monetary policy implemented by the Fed restoring full employment. how fiscal policy is used to return the economy to its potential.
Comparison and contrast strength and weaknesses of fiscal policy and monetary policy
QUESTION 5 05. The "crowding-out secondary effect expansionary macroeconomic policy a) For fiscal policy it is about government borrowing to finance the government budget deficit, associated with expansionary fiscal policy. This increased government borrowing tends to increase the market rate of interest, which dampens investment spending. b) For monetary policy it is about the expansion of the economy increasing the demand for money to service the increased volume of transactions. This tends to increase the market rate of interest, which dampens investment spending. c) Decreases the autonomous spending multiplier and thus the impact of expansionary policy. d) All of the above.
Fiscal Policy is conducted by:______________________, and Monetary Policy is conducted by:_______________________. The Fed Congress and the President
The time lag for monetary policy is typically ______________ the time lag for fiscal policy. a) shorter than b) about the same as c) longer than d) the same as
In this activity you will need to match column B with column A. The notes you made on the legal framework of government's functions and operations will come in handy in completing this activity. Monetary policy Stabilisation policy Open market operations Inflation targeting ✓ Fiscal policy ✓ Cash reserve requirements ✓ Subsidies Government policy The Constitution Act of 1996 Public Finance Management Act 1 of 1999 Personal income tax (PIT) Value-added tax Excise duties Integrated Residential Development Program (RDP) Fiscal incidence analysis A. The reserve bank is obliged to pursue monetary measures aimed at maintaining inflation in the agreed target range, meaning the value of the currency needs to be protected B. This program is based on the development of integrated housing projects. It provides for the acquisition of land, servicing of stands for a variety of land uses including commercial, recreational, schools and clinics, as well as residential stands for low, middle and high…