by BlastRoom
Compare the actors, tools, and goals of monetary and fiscal policy.
#us_hs_economics

30 questions
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The Federal Reserve buys government securities, adding reserves to banks. Which policy and actor are involved?
Congress passes a bill that increases federal spending on bridge repairs during a recession. What policy action is this?
To slow inflation, the Federal Reserve raises interest rates. Which policy and actor are involved?
Congress raises income tax rates while the Federal Reserve makes no change. How should the tax action be classified?
The Federal Reserve lowers the interest rate it pays on reserve balances to encourage banks to lend. What is this?
Congress cuts payroll tax rates for one year to leave workers with more take-home pay. Which policy and actor are involved?
The Federal Reserve sells government securities on the open market, reducing bank reserves. What policy action is this?
Congress reduces discretionary federal spending to cool an overheated economy. Which policy and actor are involved?
Use the comparison table. What belongs in the blank fiscal-policy actor cell?

Use the comparison table. What belongs in the blank fiscal-policy tools cell?

Use the comparison table. What belongs in the blank monetary-policy actor cell?

Use the comparison table. What belongs in the blank monetary-policy tools cell?

Use the comparison table. What belongs in the blank monetary-policy effects cell?

Use the comparison table. What belongs in the blank fiscal-policy effects cell?

How does the speed of monetary policy usually compare with fiscal policy?
Which fiscal policy tool can respond to a recession without Congress passing a new law?
Congress authorizes a new program of direct cash payments to households to boost consumer spending during a recession. How is Congress's action classified?
The Federal Reserve lowers the reserve requirement, allowing banks to lend a larger share of their deposits. What is this action?
Congress ends a federal subsidy program for renewable energy projects to reduce federal spending. What policy is this?
The Federal Reserve lowers the discount rate it charges banks for short-term loans. How is this action classified?
During a recession, Congress expands unemployment insurance benefits to support jobless workers. What policy is being used?
The Federal Reserve raises the reserve requirement, forcing banks to hold more of their deposits in reserve. What policy is this?
Unemployment is high and output is falling. Which monetary action is most appropriate for stimulating demand?
Inflation is high because spending exceeds the economy's capacity. Which fiscal action would help slow demand?
A recession has reduced household income and business sales. Which fiscal action would be expansionary?
Prices are rising rapidly. Which monetary action is designed to reduce inflationary pressure?
Output is below potential and unemployment is rising. Which fiscal action is intended to raise aggregate demand?
Open market operations, interest-rate tools, and reserve requirements belong to which policy toolkit?
Changes in federal tax rates and government spending levels belong to which policy toolkit?
Which institution is responsible for conducting monetary policy in the United States?
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25 questions