Final Flashcards

(5 cards)

1
Q

Fiscal Policy vs Monetary Policy

A

Fiscal Policy - Changes in government spending, or taxes, to stimulate or slow down the economy (218)

Monetary Policy - influencing economy through changes in banking system’s reserves to influence money supply and credit availability (290)

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2
Q

Expansionary Fiscal Policy

A

Increase deficit => decrease taxes, increase government spending

Shift’s AD curve to right

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3
Q

Contractionary Fiscal Policy

A

Decrease deficit => increase taxes, decrease government spending

Shift’s AD curve to left

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4
Q

simple money multiplier

A

(268) how much money is created from deposits

1/r

ie, 1/.2 = 5

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5
Q

discount rate

A

rate of interest Fed charges for loans to banks

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