Final Test

Question 1

What are the four primary functions of the fed?

Answer 1

Acts as a banker to central government, a banker to banks, as a regulator of banks, sets monetary policy.

Question 2

What are the functions of money?

Answer 2

Medium of exchange, unit of account, and store of value.

Question 3

The process of shaping taxation and public expenditure to help dampen the swings of the business cycle and contribute to the maintenance of a growing, high-employment economy, free from high or volatile inflation.

Answer 3

Fiscal Policy

Question 4

Expansionary Fiscal Policy

Answer 4

Government spending goes up, Taxes go down, Goals are to grow and get out of a recession.

Question 5

Contractionary Fiscal Policy

Answer 5

Government spending down, Taxes up, fight debt and fight inflation.

Question 6

Who advocated deficit spending during economic downturns to maintain full employment and formed the basis for fiscal policy?

Answer 6

Keynes