Cenployed+ ure mplourd 2. Label each of the following actions as expansionary fi

Question

Cenployed+ ure mplourd 2. Label each of the following actions as expansionary fiscal policy. contractionary Miscalpolicy, expansionary nionetary y, or contractionary.monetarypolig.-. Policy Type The Federal Reserve buys bonds on the open market. The Federal Reserve lowers the discount rate. The federal government increases taxes Controcthiongry fiscol policy on business The Federal Reserve increases the required reserve ratio The federal government decreases taxes expaionary fiscal policu n individuals. he stimulus package that wasexpansionarw fiscal polic plemented during the Great Recession 2

Explanation / Answer

The federal reserve buys bonds on the open market:- Expansionary Monetary policy

Reason:- Buying bonds is done to increase the money in the open market thus it is an Expansionary Monetary policy

The Federal Reserve lowers the discount rates:- expansionary monetary policy

Reason:- By lowering the discount rate, more money is inflexed in the economy.

The federal government increases taxes on business:- Contractionary fiscal policy

Reason:- Increasing the tax is a Contractionary fiscal policy

The federal reserve increases the required reserve ratio:- contractionary monetary policy

Reason:- Increasing required reserve ratio will reduce the money in the market.

The federal government decreases the taxes o individuals:- Expansionay fiscal policy

Reducing taxes will improve the money supply which is a fiscal policy.

The stimulus package that was implemented during the great recession:- Expansionary fiscal policy

The stimulus package will improve money supply through fiscal policy.

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