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6 Cards in this Set
- Front
- Back
fiscal policy
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setting of level of Government spending and taxation
done by president and congress |
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monetary policy
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done by only through the Fed
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Implications of the Employment Act of 1946
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Promote full employment and production
policy makers are required to try to stabilize aggregate demand through fiscal and monetary policy |
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Theory of Liquidity Preference
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theory of how changes in money demanded and money supplied affect interest rate in the short run
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money demand curve
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It is negatively sloped with the interest rate on the vertical axis. The interest rate is the opportunity cost of holding money so as it increases, people want to hold less money and substitute into bonds or other interest-bearing assets.
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money supply curve
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Vertical Curve and determined by Fed
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