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Zorluk: OrtaMonetary Policy, Fiscal Policy, and Economic Tools

During a period of economic overheating marked by accelerating consumer prices, a financial advisor is explaining the division of macroeconomic powers to an institutional client. Which of the following policy adjustments fall under the direct authority of the Federal Reserve rather than Congress? Select all that apply.

  1. Raising the interest rate paid on reserve balances held by depository institutionsCevap
  2. Executing reverse repurchase agreements to absorb money supply from the banking systemCevap
  3. C
    Increasing statutory corporate and personal income tax rates to curb consumer demand
  4. D
    Reducing government expenditure allocations across federal infrastructure programs

Cevap

The actions under direct Federal Reserve authority are raising the interest rate paid on reserve balances and executing reverse repurchase agreements.
The Federal Reserve possesses direct regulatory authority over monetary policy instruments, which include setting the interest rate paid on reserve balances (IORB) and conducting open market operations such as reverse repurchase agreements. Both actions serve to tighten money supply and manage inflation independently of legislative approvals.

Adım Adım Çözüm

1
Distinguish monetary policy tools from fiscal policy tools
Monetary policy involves central bank regulation of money supply and interest rates, while fiscal policy involves congressional taxation and government spending.
The question specifically asks for actions controlled directly by the Federal Reserve rather than Congress.
2
Identify Federal Reserve monetary actions
Raising the interest rate on reserve balances (IORB) and performing reverse repurchase agreements are open market/monetary tools executed by the Federal Reserve.
These tools directly impact short-term bank liquidity and interest rates without legislative involvement.
3
Filter out legislative fiscal actions
Altering federal income tax rates and adjusting government infrastructure spending require congressional legislation.
Congress retains sole constitutional authority over federal taxation and federal budget expenditures.

Anahtar Kavram

Monetary vs. Fiscal Policy Jurisdictions
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Konular

Monetary Policy, Fiscal Policy, and Economic Tools

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