Monetary and Fiscal Policy Quiz
What is an example of expansionary monetary policy?
Decrease in reserve requirements.
Expansionary policy is used when
GDP is going to slow.
An example of expansionary fiscal policy would be
Increased government spending.
An example of expansionary fiscal policy would be
Lowering Taxes
When GDP increases
Unemployment decreases.
What is an example of contractionary monetary policy?
Buying bonds.
What is an example of expansionary monetary policy?
Buying bonds.
What is an example of expansionary monetary policy
Decrease in the discount rate.
An example of contractionary fiscal policy would be
Decreased government spending.
Contractionary policy is used when
GDP is growing to fast.
What does an increase in the money supply do to interest rates?
Interest rates go down.
What does a decrease in money supply do to interest rates?
Interest rates go up.
How does expansionary monetary policy affect interest rates?
It decreases.
How does contractionary and expansionary fiscal policy affect interest rates?
It doesn't because fiscal policy deals with taxing and spending not the money supply.
How does contractionary monetary policy affect interest rates?
It increases.
What is contractionary policy?
Monetary and fiscal policy that slows down the economy.
What is expansionary policy?
Monetary and fiscal policy that speeds up the economy.
An example of contractionaty fiscal policy would be
Raising Taxes
What is an example of contractionary monetary policy?
Raising the discount rate.
An example of an expansionary fiscal policy would be
Running a budget deficit.
An example of a contractionary fiscal policy would be
Running a budget surplus.
What is an example of contractionary monetary policy?
Selling bonds.
Contractionary monetary policy is used
The fears of inflation.
Expansionary policy is used when
Unemployment is high.
