What is fiscal policy, and who is responsible for fiscal policy?
What will be an ideal response?
Fiscal policy refers to changes in federal taxes and purchases that are intended to achieve macroeconomic policy objectives. Congress and the president are responsible for fiscal policy.
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The Fed can implement open market operations
A) more rapidly than changes in reserve requirements, but less rapidly than changes in the discount rate. B) more rapidly than changes in the discount rate, but less rapidly than changes in reserve requirements. C) less rapidly than either changes in the discount rate or changes in reserve requirements. D) more rapidly than either changes in the discount rate or changes in reserve requirements.
Suppose the Fed decreased the growth rate of the money supply. Which of the following would be lower in the long run?
a. both the natural rate of unemployment and the inflation rate b. the natural rate of unemployment, but not the inflation rate c. the inflation rate, but not the natural rate of unemployment d. neither the natural unemployment rate nor the inflation rate