It is the opposite of contractionary monetary policy. A. interest rates B. taxes C. household savings D. government spending. The country’s monetary authority increases supply with expansionary monetary policy and decreases it with contractionary monetary policy. Unconventional Monetary Policy Tools . Suppose the monetary authority increases the money supply, given the velocity of money and the level of real output. The Federal Reserve has a variety of policy tools that it uses in order to implement monetary policy. Monetary policy is best described by which of the following statements? B CA D. C Nex A decrease in the money supply will raise the interest rate, decrease aggregate demand, and decrease real output. Correct! Top Answer. Here are the three primary tools and how they work together to sustain healthy economic growth. The above table shows alternative possible exam outcomes with three alternative uses of the student's time. A student has only a few hours to prepare for two different exams tomorrow morning. What is Monetary Policy? Which of the following best describes a monetary policy tool? The problem with conventional monetary tools in periods of deep recession or economic crisis is that they become limited in their usefulness. Scarcity implies that A. consumers would be willing to purchase the same quantity of a good at a higher price. A. 7. The expansion policy is undertaken with an aim to increase the aggregate demand by cutting the interest rates and increasing the supply of money in the economy. D B. b. In economics and political science , fiscal policy is the use of government revenue collection mainly taxes and expenditure spending to influence a country's economy. This, in turn, raises the price level. With increase in the money supply, liquidity rises with the people who increase the demand for goods and services. The Balance Menu Go. Fiscal policy tools can achieve, or at least attempt to achieve, both economic and political goals. There are two tools of monetary policy.These are qualitative credit control and quantitative control. The federal funds rate is the most well-known Federal Reserve tool. It lowers the value of the currency, thereby decreasing the exchange rate. See Answer. If the economy is growing too fast, fiscal policy can apply the brakes by raising taxes or cutting spending. (i) tax rate (ii) government spending (iii) reserve requirement Which of the following best describes a monetary policy tool? Which of the following statements best describes the cause-and-effect chain of an expansionary monetary policy? At its best, discretionary fiscal policy should work in alignment with monetary policy enacted by the Federal Reserve. Describe the monetary policy tools available to the Fed and how they can be used to decrease the money supply. d. This tool is best for everyday monetary policy. Which of the following best describes a fiscal policy tool? The expansionary policy uses the tools in the following way: 1. Most central banks also have a lot more tools at their disposal. Monetary policy and fiscal policy refer to the two most widely recognized tools used to influence a nation's economic activity. What are the Instruments of Monetary Policy? Expansionary Monetary Policy: The expansionary monetary policy is adopted when the economy is in a recession, and the unemployment is the problem. 0 votes. B. Commercial banks can usually take out short-term loans from the central bank to meet their liquidity shortages. Fed hasthree main primarily monetary policytools: open market operations, the discount view the full answer. Question 1 1 / 1 point In the _____, households work and receive payment from firms. The goal of a contractionary policy is … Monetary policy is formulated based on inputs gathered from a variety of sources. Best answer. In return for the loans, the central bank charges a short-term interest rate. Each individual dollar in the population is considered a sampling unit, so that account balances or amounts in the population with a higher value have a proportionally higher chance of being selected. Monetary unit sampling (MUS) is a statistical sampling method that is used to determine if the account balances or monetary amounts in a population contain any misstatements. principles-of-economics; 0 Answer. Which tool of monetary policy is most likely being described by each of the following statements? The process involved is as follows. Monetary Policy: Definition, Objectives, Types, Tools Market oriented economy Macroeconomics Is concerned with the . The Federal Reserve’s three instruments of monetary policy are open market operations, the discount rate and reserve requirements. Which of the following best describes a monetary policy tool Question from ECON 201 at University of Maryland, University College interest rates Question 2 0 / 1 pts Refer to Table 2-1. pts Which of the following best describes a monetary policy tool household from ECON 101 at San Jose State University Interest rates Gross Domestic Product equals $1.2 trillion. Monetary policy actions take time. Managing the economy by controlling the money supply. Such a situation could be corrected by an expansionary monetary policy. The adjustments to short-term interest rates are the main monetary policy tool for a central bank. Monetary Policy Refers To Tools Used By Central Bank To Influence Economic Activity. a) household spending b) bank lending c) financial capital markets d) government spending . The Federal Reserve has a variety of monetary policy tools it can use in order to implement monetary policy. Policies Congress puts into effect to manage the money supply. Expansionary monetary policy is when a central bank uses its tools to stimulate the economy. Solved: Which Of The Following Is One Of The Federal Reser Which of the following best describes a monetary policy tool Question. Which of the following best describes a fiscal policy tool? It is a powerful tool to regulate macroeconomic variables such as inflation Inflation Inflation is an economic concept that refers to increases in the price level of goods over a set period of time. It boosts economic growth. If consumption equals $690 billion, investment equals $200 billion, and government spending equals $260 billion, then: Exports exceed imports by $50 billion