The President is getting ready for a press conference, and needs quick advice on "closing the inflationary gap".  What should the President say? a, government spending should increase or decrease? b. taxes should increase or decrease? c. discount rates and federal funds should increase or decrease? d. reserve requirement increase or decrease? e. open market operations increase or decrease?

Match the correct policy with its description. Column A 1. 2. 3. 4. During a contraction or recession, the government can do two things: Decrease Taxes Or Increase Spending During a period of excessive inflation (during a period of expansion), the government can do two things: Increase Taxes Or Decrease Spending Increased lending by banks to customers (increased money supply) Lower Interest Rates on loans and bank accounts Increased borrowing from the Fed by banks Decreased lending by banks to customers (decreased money supply) Higher Interest Rates on loans and bank accounts Decreased borrowing from the Fed by banks % 5 M Column B a. Expansionary Fiscal Policy b. Contractionary Monetary Policy c. Contractionary Fiscal Policy d. Expansionary Monetary Policy

According to Monetarists, what should the government do if unemployment is 4% and inflation is 12%? Select one: a. Decrease the supply of money b. Decrease government spending c. Raise taxes d. Do nothing e. Lower interest rates

In the most recent FOMC meeting, the Federal Reserve increased the Federal Funds rate. By doing this, this suggests the Federal Reserve: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. is willing to sacrifice higher prices to save jobs a is willing to sacrifice jobs to keep prices stable is trying to counter fiscal policy actions d believes the Federal Funds rate is not important

If Congress raises taxes and the Fed reduces money supply, then in the short run, the two policies would lead to:a. lower income but we don’t know if interest rate will rise or not.b. higher income but we don’t know if interest rate will rise or not.c. a lower interest rate but we don’t know if income will rise or not.d. a higher interest rate but we don’t know if income will rise or not

Why do we care about price stability ? Group of answer choices   All of the options. It is one of the mandates of the Fed set by the Congress. It helps in achieving maximum stable output, another mandate of the Fed set by the Congress   Which is correct?

Review the rubric to make sure you understand the criteria for earning your grade. Read the articles An Update on the Economy and Monetary Policy and Recent and Near-Term Fiscal Policy Write a five- to six-page paper answering the following regarding fiscal and monetary policy changes: Explain the key aspects of today’s monetary policy and how they are affecting GDP and aggregate demand/aggregate supply. Explain the key aspects of today’s fiscal policy and how they are affecting GDP and aggregate demand/aggregate supply. Are these policies being well coordinated today? In essence, are they both working in unison to address current economic conditions? Explain. What are these policies’ effects on aggregate supply and aggregate. Do understand they affect supply as well as demand. You must use a minimum of five sources for your research paper, at least three of which are scholarly. Use proper spelling, grammar, and APA formatting for your analysis paper. When you have completed your…

Start with a brief introduction that explains use of Government policy to control the economy. When is it appropriate to use monetary and fiscal policy to stimulate or stabilize the economy? Look at both. When is it inappropriate to use monetary and fiscal policy to stimulate or stabilize the economy? Look at both. What specific fiscal policy tools would you use to stimulate aggregate demand and how? What specific monetary policy tools would you use to stimulate aggregate demand and how? What is your conclusion, should policymakers use the monetary and or fiscal policy, or a combination of both, to stimulate aggregate demand? Explain your reasoning.

*Does monetary or fiscal policy have a longer time lag?  Why?

1. What are the political and economic limitations upon (a) fiscal policy and (b) monetary policy?   2. What are the implications of a liquidity trap for the Federal Reserve?