Chapter 15

Question 1

What is monetary policy?

Answer 1

a whole formed by combining several (typically disparate) elements.

Government action to make money supply and interest rates towards achieving microeconomic objectives

Question 2

What are the Goals of Monetary policy?

Answer 2

1. Price stability
2. High employment
3. Economic Growth
4. Stability of financial statisitics

Question 3

What are the two main targets monetary policy?

Answer 3

Interest Rate adn Money supply

Question 4

What is the graph for an expansion in monetary policy?

Question 5

What is a contractionary monetary policy?

Answer 5

type of policy that is used as a macroeconomic tool by the country’s central bank or finance ministry to slow down an economy. Contractionary policies are enacted by a government to reduce the money supply and ultimately the spending in a country.

Question 6

What is the graph for the Contractioinary Monetary Supply curve?

Question 7

What is a fiscal policy?

Answer 7

Government actions to manage taxes and government purchases to achieve macro economic objectives

Question 8

What are two main components of a fiscal policy?

Answer 8

Government purchases and the transfer of payments

Question 9

What is the main sources of government revenue?

Answer 9

Tax

Question 10

What does tax influence?

Answer 10

Disposible income and consumer behaviour and investment expindeture /They also influence COP and as such influence investment and decision