Final Exam- 33 Questions
12 & 13
How do banks and other financial institutions create money
o How was it created, why, when
Who controls the money supply?
Tools of monetary policy?
o How are they applied
Tight money policy?
Loose Money policy
Chapter 10: Fiscal Policy
Fiscal policy: involves adjusting government spending on goods and services, transfer payments
and taxes in order to manage the macro economy
- Includes tax reductions, rebates and infrastructure spending
- Biggest revenue comes
Chapter 12: Money and the Financial System
Money- is anything that is accepted in exchange for other goods and services or for the
payment of debt
o Value must be easy to determine, therefore easily standardized
o Secondly, must be divisible so that
1. Money: the 1st monetary policy
What is money?
o Anything that buys things - can be beads, metal, coins, etc.
o it happens as a facilitator of trade
o barter - exchange goods for goods, but its inefficient b/c it takes a double coincidence of wants