What consumer behavior is the federal reserve board trying to encourage when it implements a loose monetary policy?
decreased saving and increased spending.
What consumer behavior is the Federal Reserve Board trying to encourage when it implements a loose monetary policy quizlet?
What consumer behavior is the Federal Reserve Board trying to encourage when it implements a loose monetary policy?
inflation
. It will raise interest rates and make your truck payment higher.
What consumer behavior is the Federal Reserve Board trying to encourage when it implements a loose monetary policy?
| Question Answer | What consumer behavior is the Federal reserve board trying to encourage when it implements a loose monetary policy? decreased saving and increased spending | which action by the Federal Reserve would help to slow down rising inflation? sell bonds |
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Which action by the Federal Reserve would help to slow down rising inflation?
Tight monetary policy and raising the interest rates
is the action taken by the Federal Reserve to slow down the rising inflation.
What is the Federal Reserve’s role in helping to control inflation?
The Federal Reserve uses interest rates to help the economy maintain economic growth and curb inflation. … In its role as money manager, the Federal Reserve has three primary goals: to
maintain stable prices
(control inflation), ensure maximum employment, and increase production output.
What would be a reasonable monetary policy if the economy was in a recession?
The Federal Reserve might raise interest rates. The Federal Reserve might raise interest rates. What would be reasonable monetary policy if the economy was in a recession? … Fearing
a recession, the government decides to give citizens a tax rebate check to buy Christmas gifts.
What banking behavior is the central government trying to encourage when it implements a tight monetary policy?
The central government implements a tight monetary policy to
encourage fewer loans
. A tight monetary policy reduces the amount of money in circulation, which pushes short-term interest rates up.
Which of the following is a monetary policy that can be used to counteract a recession?
Which of the following is a monetary policy action used to combat a recession?
decreasing taxes
.
What would be reasonable monetary policy during a period of high inflation?
What would be reasonable monetary policy during a period of high inflation?
reduce the money supply
. put downward pressure on prices as investment and spending slows.
What contractionary monetary policy actions may be used to help reduce inflation?
Governments can also employ a contractionary monetary policy to fight inflation by
reducing the money supply within an economy via decreased bond prices and increased interest rates
.
What did the Federal Reserve do to try to reduce inflation quizlet?
In order to combat inflation, the Fed engages in an open market sale of bonds,
decreasing the money supply and raising the interest rate
.
What steps government can take to contain the rise of inflation?
In fiscal policy, the government controls inflation either
by reducing private spending or by decreasing government expenditure
, or by using both. It reduces private spending by increasing taxes on private businesses. When private spending is more, the government reduces its expenditure to control inflation.
Is low inflation good for households?
Nearly
all economists advise keeping inflation low
. Low inflation contributes towards economic stability – which encourages saving, investment, economic growth, and helps maintain international competitiveness.
Which monetary policy by the Federal Reserve would be most effective in fighting high inflation?
Hiking interest rates
is the most common way the Fed controls inflation.
What happens if inflation is too high?
If inflation gets too high, the Federal Reserve is
likely to have to raise interest rates to try to slow the economy down and prevent spiraling inflation of the type last seen
in the United States in the late 1970s and early 1980s. That kind of Fed action has led to a recession in the past.
Which out of the following is phenomenon that leads to cost push inflation?
Cost-push inflation can occur
when higher costs of production decrease the aggregate supply (the amount of total production) in the economy
. Since the demand for goods hasn’t changed, the price increases from production are passed onto consumers creating cost-push inflation.
