24. How does the Fed increase or decrease the money supply? Answer: open market 25. How does an increase (decrease) in the money supply affect interest rates? 26. How does the Federal Reserve combat recession? This is called MONETARY (expansionary; contractionary) policy. 27. What is the fiscal cliff? How could monetary policy offset the effects of a fiscal cliff? How could fiscal policy offset the effects of a fiscal cliff? In each case, does the price level end 28. Suppose the U.S. economy is experiencing an inflationary boom. How can fiscal or monetary policy offset the effects of the boom and restore output to potential? In each case, 29. What is the monetary policy transmission mechanism?
--Employment Report for November 7.7% 146,000 CREATED 98,000 EXPECTED--Outcome of FOMC meeting this week with respect to the setting of interest rates and why.
You've reached the end of your free preview.
Want to read all 5 pages?
- Fall '10
- staff
- Inflation, Monetary Policy, Supply And Demand, Federal Reserve, price level
