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Macroeconomics Ex 4

QuestionAnswer
Two options for expansionary fiscal policy Increase government spending, reduce taxes
Two options for contractionary fiscal policy Decrease Government Spending, raise taxes
Three functions of money Medium of exchange, unit of account, store of value
Name three characteristics of Federal Reserve Banks Central bank, Quasi-Public Banks, Banker's Bank
Name four functions of Federal Reserve Banks Issuing currency, Setting reserve requriements and holding assets, lending to financial institutions providing for check collection acting as a fiscal agent, supervising banks, controlling the money supply
Give two advantages of free trade Promotes competition and deters monopoly Compels firms to be innovative and progressive
Name two reasons we demand money Purchases Assets
Give two direct effects of tariffs Decline in consumption Increase in domestic production Decline in imports Tariff revenue
Give two options for expansionary monetary policy Open market operations through buying of bonds Decreasing the reserve ratio Decreasing the discount rate
Give two options for contractionary monetary policy Open market operations through the selling of bonds Increasing the reserve ratio Increasing the discount rate
Created by: JDLane87
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