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Flashcards in Final Deck (5)
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1

Fiscal Policy vs Monetary Policy

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)

2

Expansionary Fiscal Policy

Increase deficit => decrease taxes, increase government spending

Shift's AD curve to right

3

Contractionary Fiscal Policy

Decrease deficit => increase taxes, decrease government spending

Shift's AD curve to left

4

simple money multiplier

(268) how much money is created from deposits

1/r

ie, 1/.2 = 5

5

discount rate

rate of interest Fed charges for loans to banks