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Fiscal/Monetary
VUS.15e
Question | Answer |
---|---|
What is inflation? | Prices go up and the value of the dollar goes down |
What is a recession? | A downturn in the economy with high unemployment |
What is fiscal policy? | Taxing and spending actions by Congress and the President to influence the economy |
What two actions can Congress and the President take to reduce inflation? | 1) Raise taxes 2) Cut government spending |
What two actions can Congress and the President take to end a recession? | 1) Lower taxes 2) Increase government spending |
Who controls fiscal policy? | Congress and the President |
What power gives Congress and the President control over fiscal policy? | 1) The Lawmaking power 2) Congress passes a bill, and the President signs it into law |
What is monetary policy? | Federal Reserve actions to influence the economy by regulating the money supply and the availability of credit |
What determines the availability of credit? | Interest rates |
What action can the Federal Reserve take to reduce inflation? | Raises interest rates |
What action can the Federal Reserve take to end a recession? | Lowers interest rates |
Who controls monetary policy? | the Federal Reserve |
What power gives the Federal Reserve control over monetary policy? | The power to set interest rates |