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Fiscal and Monetary
Money Supply
The Fed and The Economy
Monetary Policy
Misc.
100
This fiscal policy involves an increase in government spending and/or a decrease in taxes.
What is expansionary policy?
100

The measure of money supply that includes currency and checking deposits

What is M1?

100

An increase in the money supply leads interest rates to do this.

What is decrease?

100

This is the most immediate and effective tool the Fed uses to impact the money supply.

What are open market operations?

100

It was this market that sparked the 2008 financial collapse.

What is the subprime mortgage market?

200
This leader of the Chicago economic school thought that economic action should be taken by altering the money supply instead of through government spending.
Who is Milton Friedman?
200
This is the current Fed funds rate
What is 0.50?
200
An increase in interest rates leads to this change in the value of securities
What is a decrease?
200
The Fed quickly responded to this event, the largest one-day stock market decline in history.
What is Black Monday?
200
A period in which every person of working age who wishes to work can find employment.
What is full employment?
300
This rate of unemployment is acceptable even in a period of full employment.
What is the natural rate of unemployment?
300
These groups are the ones who directly affect Fed fund rate
Who are private borrowers and reserve lenders?
300
Exchange rates increase - leading to fewer exports - when interest rates do this.
What is increase?
300
If the Fed takes steps to increase the money supply, the fed funds rate will do this.
What is decrease?
300
Government expenditure equals the sale of bonds plus this.
What is taxation?
400
This goal of monetary policy is essentially the same thing as keeping inflation at a healthy level.
What is price stability?
400
Liquidity trap is associated with this group of monetary policy theorists.
What is Keynesian?
400

Nominal GDP can be divided up into real GDP and this

What is inflation?

400
The Fed does this when it steers inflation toward a particular rate.
What is inflation targeting?
400
This phrase is used to describe the Fed's role in providing emergency liquidity.
What is lender of last resort?
500
This term describes a period in which monetary policy does not work because interest rates are already low.
What is a liquidity trap?
500

This is the interbank lending rate and represents the primary cost of short-term loanable funds.

What is the Fed fund rate?

500
A complication for the Fed is not knowing this factor, which tells how severely changes in the money supply will affect the economy
What is the velocity of money?
500

The Fed will most likely do this if inflation is above the target rate.

What is raise interest rates?

500

It was previously theorized that there is a tradeoff between inflation and this.

What is unemployment?