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4 Cards in this Set
- Front
- Back
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The fed’s 2 responsibilities |
1. To Regulate the nations banks 2. Conduct monetary policy/ manage the money supply |
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3 tools the fed uses to affect money supply |
1. Set the reserve requirement 2. Set the discount rate 3. Open market operations |
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Expansionary monetary policy |
Goal= to stimulate the economy Process- fed buys govt bonds , money supply increases, interest rates fall, C, I increase |
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Contractionary monetary policy |
Goal= slow down the economy and decrease inflation Process- the fed sells bonds (sell=small), money supply decreases,interest rates rise, C ,I decrease |
