ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Monetary policy reflects the Federal Reserve’s authority to change the money supply; fiscal policy reflects the government’s power to influence the economy through taxes, expenditures, and borrowing.
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Monetary policy reflects the Federal Reserve’s authority to change tax rates; fiscal policy reflects the government’s power to influence the money supply by lowering the discount rate for loans to banks.
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Monetary policy refers to the Federal Reserve’s influence in the economy through borrowing and creating a deficit; fiscal policy refers to the government’s authority to increase spending.
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Monetary policy refers to the Federal Reserve’s authority to increase spending; fiscal policy refers to the government’s authority to increase the discount rate for loans to banks.
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Detailed explanation-1: -D. Which statement BEST describes the U.S. government’s monetary policy and fiscal policy? A. Monetary policy reflects the Federal Reserve’s authority to change the money supply; fiscal policy reflects the government’s power to influence the economy through taxes, expenditures, and borrowing.
Detailed explanation-2: -Both monetary and fiscal policies are used to regulate economic activity over time. They can be used to accelerate growth when an economy starts to slow or to moderate growth and activity when an economy starts to overheat. In addition, fiscal policy can be used to redistribute income and wealth.
Detailed explanation-3: -Monetary policy refers to the actions of central banks to achieve macroeconomic policy objectives such as price stability, full employment, and stable economic growth. Fiscal policy refers to the tax and spending policies of the federal government.
Detailed explanation-4: -The Federal Reserve sets U.S. monetary policy and the New York Fed plays a central role in implementing it. The Fed’s economic goals prescribed by Congress are to promote maximum employment, stable prices, and moderate long-term interest rates.