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Economics > Monetary & Fiscal Policy > Flashcards

Monetary & Fiscal Policy Flashcards

1
Q

What is a Monetary Policy

A
  1. How the Federal Reserve’s action changed the money supply; Appointed Official
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2
Q

How long does Head term serve

A

4 years

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3
Q

How long does a board member serve

A

13 years

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4
Q

What are the main tools of Monetary Policy

A
  1. Open market operation - Buying & selling of government security; Bonds
  2. Adjusting the Federal Reserve Requirement
  3. Adjusting discount rates
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5
Q

What are Bonds

A

A loan taken out by a company, a safer option

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6
Q

What are bonds used for when it comes to buying

A

Expand, Grow, Stimulate

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7
Q

What are bonds used for when it comes to selling

A

Contract/Slow the economy down by taking money out of supply.

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8
Q

What does “Adjusting the reserve requirement”

A
  1. Adjusting how much the banks must keep in reserve
  2. The higher the number the less money to loan out.
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9
Q

What are Discount Rates

A
  1. Loaning Money to other banks
  2. Raises the rates & banks will borrow more
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10
Q

What are the 3 duties of a central bank

A

Holding reserves, assuring stability, lending money

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11
Q

How is the Fed different from other banks?

A
  1. Supervising banking in the United States
  2. Provides banking security for private & national banking (referred to as banker’s bank)
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12
Q

Expansionary Monetary Policy

A

Is a plan to increase the money supply

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13
Q

Contractionary Monetary Policy

A

Is a plan to reduce the money supply

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14
Q

What is Fiscal Policy

A

How the Government/Elected Officials including Congress & President control the economy

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15
Q

What does Fiscal Policy do to keep the economy running?

A
  1. Borrowing Money
  2. Taxes Collected
  3. Spending
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16
Q

Tools of Fiscal Policy

A
  1. Tax Incentives - Breaks, Penalties, Percentages
  2. Spending - on things like roads, schools, airports, or military, mainly everything
  3. Borrowing - from who & at what percent
17
Q

3 Types of Taxes

A
  1. Progressive - The Wealthier pay a higher percent
  2. Regressive - The poor pay more
  3. Proportional (Flat) - Everyone pays the same percent

Economics (3 decks)

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