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- Lesson Plan:Fiscal Policies Fed toolswhat Fed can do with OMO to solve inflation Fiscal and Monetary efficiencyimpact of tools on loanable funds market Impact of loanable funds on AD/AS
- What are two fiscal policy and how can they solve inflation?
- Another fiscal policy is government spending it can increase own spending on goods, services, and infrastructure projects this stimulates economy and increases demand for goods and services
- One of them is Taxation, the gov can increase taxes to reduce the amount of money people have to spend which helps slow down consmer spendinf and reduce demand
- Lesson Plan:Fiscal Policies Fed toolswhat Fed can do with OMO to solve inflationFiscal and Monetary efficiencyimpact of tools on loanable funds market Impact of loanable funds on AD/AS
- Lastly Disount rate; discount rate is interest rate Fed charges bank when funds are borrowed. by increase or decrease fed encourages discourages bank from borrowing which impacts money supple influences economic conditions
- fed tools:the open market operations. The fed can buy/sell governemt securities which can increase/decrease money supple in the economy which influences interast rates and stimulates or slows down economic activity
- Reserve requirments , feds set reserve requirment which is percentageod deposits that bank holds as reserves. Adjusting requirments amount of money lent out is controlled impacting money supply
- Fed can sell governemnt securities in the open market. DOing that they can eeduce the money supple which can help slow down spending and decrease inflationary pressures.
- What can fed do with OMO to solve inflation
- Wow thats interesting i never knew that
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