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Zorluk: KolayMonetary Policy, Fiscal Policy, and Economic Tools

Which of the following actions represents a fiscal policy tool used by the U.S. federal government to influence economic activity?

  1. Increasing federal expenditure on public infrastructure projectsCevap
  2. B
    Lowering the discount rate for loans extended to commercial banks
  3. C
    Purchasing U.S. Treasury securities through open market operations
  4. D
    Raising the interest rate paid on reserve balances held at the central bank

Cevap

Increasing federal expenditure on public infrastructure projects
Fiscal policy refers specifically to government actions concerning taxation and spending decisions made by Congress and the President. Increasing federal expenditures on public infrastructure is a direct fiscal mechanism used to stimulate aggregate demand.

Adım Adım Çözüm

1
Identify the authority behind fiscal policy versus monetary policy.
Fiscal policy is set by Congress and the President (the federal government), whereas monetary policy is controlled by the Federal Reserve (the central bank).
Understanding institutional roles is necessary to distinguish policy tools.
2
Categorize the options into tax/spending policies versus interest rate/money supply controls.
Government spending on public infrastructure is a direct expenditure action by the federal government, making it fiscal policy.
Discount rate adjustments, open market operations, and interest on reserve balances are all central bank monetary tools.

Anahtar Kavram

Fiscal Policy vs. Monetary Policy Tools
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Konular

Monetary Policy, Fiscal Policy, and Economic Tools

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