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Question 1

countercyclical policies

Answer 1

attempt to reduce the intensity of economic fluctuations and smooth the growth rate of employment gdp and prices

Question 2

countercyclical monetary policy

Answer 2

conducted by the central bank, attempts to reduce economic fluctuations by manipulating bank reserves and interest rates

Question 3

countercyclical fiscal policy

Answer 3

passed by legislative branch and signed into law by the executive branch, aims to reduce economic fluctuations by manipulating government expenditures and taxes

Question 4

expansionary monetary policy

Answer 4

increases that quantity of bank reserves and lowers interest rates

Question 5

tools of the fed

Answer 5

changing the reserve requirement, changing the interest rate paid on reserves deposited at the fed, lending from the discount window, quantitative easing

Question 6

contractionary monetary policy

Answer 6

slows down growth of bank reserves, raises interest rates, reduces borrowing, slows down growth of money supply, and prevents inflation from rising

Question 7

automatic stabalizers

Answer 7

or countercyclical fiscal mechanisms, they stimulate the economy during economic contractions

Question 8

crowding out

Answer 8

occurs when rising government expenditure partially or even fully displaces expenditures by households and firms