monetary and fiscal policy-2
Storyboard Text
- I know this one!
- And the tools from the fiscal policy are the government spending and taxation
- The tools from the monetary policy are the required reserve, that is the percent of our deposit banks that they can't loan; the OMO, open market operation, that buys or sells bonds; and finally the discount rate, that is the interest rate the Fed charges on loans to member banks
- And what would happen if the Fed increase the interest rate?
- At the same time with a higher interest rate the economic growth will decrease because it will be less money in circulation.So what would they be fighting, inflation or recession?
- Fed-Required reserve-Open Market Operation-Discount rate
- Monetary policy
- That is a very good question. If the Fed increase the discount rate it will become more expensive to borrow money so less people will do it
- Great job guys!That is perfectly correct
- Fiscal policy
- Government-Spending-Taxes
- I will tell my parents what I learned today at economics, I'm learning really interesting things
- Yes, I have a lot of fun in this class while I'm learning new things
- They would be fighting INFLATION!
- Thank you Mrs. Garcia, we enjoyed a lot this class
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