Ch. 1-15 Written Portion

Question 1

Monetary policy

Answer 1

1. What Fed does to fix economy
2. Raise and lower discount rates
3. But or sell bonds to member banks

Question 2

Fiscal policy

Answer 2

1. The governments attempt to fix the economy through taxing and government spending
2. Discretionary- people have to vote on it
3. Passive- goes into affect automatically

Question 3

Demand side policies

Answer 3

1. Designed to increase or decrease total demand in the economy
2. Multiplier affect
3. Accelerator- when things get going they keep going

Question 4

Supply side

Answer 4

1. Designed to stimulate output and lower unemployment
2. Deregulation- removal of government regulations
3. Increasing production and decreasing unemployment without increasing inflation