Fill in the following table by identifying whether it’s a fiscal policy or monetary policy. Also indicate whether the proposed Federal Reserve action will increase or decrease the money supply.   Policies Type of Policy Effect on money supply A increase in government spending     A decrease in the required reserve ratio     A sale of Government Securities (Treasury bonds)     A lowering of the discount rate     Buying government Securities (Treasury Notes)     A decrease in taxes

Which of the following are objectives that the Bank of Canada tries to achieve when setting monetary policy? Check all that apply.

Changes in the money supply The following graph represents the money market for some hypothetical economy. This economy is similar to the United States in the sense that it ha a central bank called the Fed, but a major difference is that this economy is closed (and therefore does not have any interaction with other world economies). The money market is currently in equilibrium at an interest rate of 4% and a quantity of money equal to $0.4 trillion, designated on the graph by the grey star symbol. INTEREST RATE (Percent) 6.0 5.5 5.0 45 4.0 35 3.0 25 20 0 Money Demand 0.1 Money Supply 0.2 03 0.4 0.5 0.6 0.7 MONEY (Trillions of dollars) 08 4 New MS Curve New Equilibrium Ⓒ image 1 Suppose the Fed announces that it is lowering its target interest rate by 75 basis points, or 0.75 percentage points. To do this, the Fed will use open- market operations to the money by the public. Use the green line (triangle symbol) on the previous graph to illustrate the effects of this policy by placing the…

Following the Great Recession, the Federal Reserve adopted a restrictive reserve policy.   true  false