Monetary & Fiscal policy

Question 1

Monetary policy is controlled by __________

Answer 1

The Federal Reserve Bank

Question 2

Name the 3 Fed Mandates

Answer 2

Maintain sustainable long-term growth as measured by GDP

Maintain price levels that are supported by that economic growth as measured by inflation.

Maintain full employment

Question 3

Name the 3 primary tools of the Fed

Answer 3

Discount rate
Reserve requirement
Open market activities (buy and sell securities)

Question 4

What does the Fed do to restrict/contract or tighten?

Answer 4

Increase discount rate

Increase reserve requirement

Sell securities

Question 5

What does the Fed do to accommodate/expand

Answer 5

Decrease discount rate

Decrease reserve requirement

Buy securities

Question 6

Fiscal policy is controlled by

Answer 6

Congress

Question 7

What is the only means of revenue generation for the government?

Answer 7

Taxation

Question 8

What tools are used in Fiscal policy?

Answer 8

Government spending and taxation