Unit 5 Exam Monetary Policy and Fiscal Policy

Government securities are

BONDS

Fiscal Policy is controlled by

Congress ( the Federal Government)

The FED adjusts the _______________ to encourage or discourage borrowing

Discount Rate

If the smallest unit of US money was the 100$ bill, which characteristic of money would it not meet?

Divisibility

What is another name for a Sin tax

Excise tax

If money can be carried from place to place and transfered from person to person it has the characteristic of

Portability

type of tax structures that takes a larger percentage from higher income people and a lower percentage from lower income people

Progessive

The French Revolution was caused by this kind of tax structure

Regressive

The Reserve Requiment

The percentage of money banks must hold as cash

Who was president when the Federal Reserve was created

Woodrow WIlson

who is on the 100,000$ note

Woodrow Wilson

What is the money supply

all the money in circulation

Margin Requirments

are the percentage of cash that investors must have to buy stocks, options and other investments

The act the made the FDIC permeant was

banking act of 1933

Government securities are

bonds

THE FOMC controls the

buying and selling of government securities

When the Federal Reserve practices easy money they

lower the discount rate

supply side economist believe the government should

take a hands off approach to the economy

demand side economist believe the government should

take a hands on approach to the economy

Open Market Operations can influence

the money supply, availability of credit, aggregate demand

How long are the terms for the Board of Governors of the FED

14 years

What year was the Federal Reserve created

1913

FOMC stands for

Federal Open Market comittee

Monetary policy is controlled by the

Federal Reserve

When the government prints the words- This note is legal tender for all debts public and private- It has transformed the paper in to

Fiat Money

Taxation and spending are the 2 tools of

Fiscal Policy

What is money in the form of travelers checks, demand deposits, and other checking accounts

M1

Who is the only woman to be on paper currency currently

Martha Washington

Demand deposits is another name for

checking account

When Congress practices expansionary Fiscal Policy

cut taxes and increase spending

What characteristic of money does salt not meet

durability

tight money policy fights________ and causes ______

fights inflation and causes unemployment

easy money policy fights ________ and causes _______

fights unemployment and causes inflation

What does the FED do ...

hold cash reserves, stabilize the national monetary and banking system, makes loans to banks and the government

When congress practices contrationary Fiscal Policy

increase taxes and cut spending

What did the S&L(savings and loan) Crisis show the need for

increased regulation of banks

what are the functions of commercial banks

make loans, accept deposits, transfer money

What are the reasons a bank would deplete its reserve and need a loan from THE FED

natural disaster, financial disaster, season factors

Type of tax that takes the same percentage from individuals of all income levels

proportional

What was the major success of the Federal Reserve system in the early years

provide enough money and credit to finance WW1

When the Federal Reserve practices tight money they

raise the discount rate

what direction does Lincoln face on the Penny

right

Pyramid Reserves

small banks deposit reserves with large banks

when people use money to clarify opportunity cost, they are using money as a

standard of value