Fiscal policy and monetary system

Question 1

Fiscal policy under recession

Answer 1

1,. Decrease taxes

2. increased government spending

Question 2

Fiscal policy was implemented by Congress and president:

Answer 2

Congress and president:

Problem:rarely pay off deficit spending once the economy recovers, leading to increasing national dept

Question 3

Fiscal policy under inflation

Answer 3

1. Increase taxes

2. government spending

Question 4

Monetary policy under recession

Answer 4

1. increase money supply (Fed buys bonds)

2. Decrease interest rates

Question 5

monetary policy was implemented by the

Answer 5

federal reserve (The “fed”

Question 6

monetary policy under inflation

Answer 6

1. decrease money supply (Fed sells bonds)

2. increase interest rates