1. Warm Up
Check your notebook, do you have all eight notes? If not make sure to get them by Friday!
Grab a white board, marker, and eraser to share.

2. Fiscal Policy v. Monetary Policy
Unit 4 Review
Fiscal Policy v. Monetary Policy

3. What are the two tools of fiscal policy?
Gov’t spending & taxes

4. What is it called when you try to stabilize the economy by increasing the money supply?
Expansionary or Easy money policy

5. What is it called when you try to stabilize the economy by decreasing the money supply?
Contractionary or Tight money policy

6. Using fiscal policy how would you stabilize an the economy in a recession?
Expansionary or Contractionary policy
Expansionary

7. Using fiscal policy how would you implement expansionary policy?
Increase gov’t spending & decrease taxes

8. Using fiscal policy how would you stabilize an the economy with high inflation?
Expansionary or Contractionary policy
Contractionary

9. Using fiscal policy how would you implement contractionary policy?
Decrease gov’t spending & increase taxes

10. What are the three tools of monetary policy?
Reserve Requirement
Discount Rate
Open Market Operations

11. Tight or easy money policy Easy money policy
Using monetary policy how would you stimulate the economy if the GDP has been declining for two years?
Tight or easy money policy
Easy money policy

12. Using monetary policy how would you stop rapid inflation?
Tight or easy money policy
Tight money policy

13. How would you use monetary policy to implement easy money policy?
Lower the reserve requirement
Lower the discount rate
Buy bonds/securities

14. How would you use monetary policy to implement tight money policy?
Raise the reserve requirement
Raise the discount rate
Sell bonds/securities

15. What would cause high inflation?
High employment rate
Shortage of consumer goods
Decrease in taxes
Increase in gov’t spending
Demand-pull
Cost-push
Excessive monetary growth

16. Who implements monetary policy?
Federal Reserve

17. Who implements fiscal policy?
Federal Gov’t