Policy DebatesTerms and Formulae Terms Discretionary Policy - Monetary policy and fiscal policy whereby the appropriate course of action is left to the discretion of policymakers rather than to the dictates of preset rules. Expansionary Fiscal Policy - Policy utilized by the government to stimulate the economy through reducing taxes and increasing government spending. Expansionary Monetary Policy - Policy utilized by the Fed to stimulate the economy through purchasing government bonds, reducing the reserve requirement, and reducing the federal funds interest rate. Factors of Production - The inputs of capital and labor required to produce output whose improvement leads to productivity increases. Federal Deposit Insurance Corporation - A corporation that insures individual bank accounts up to $100,000 to ensure that the public is confident in the banking system. Federal Funds Interest Rate - The discount interest rate at which the branch banks of the Fed loan money to other banks.
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