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
