Chapter 16 Econ Checklist

studied byStudied by 1 person
0.0(0)
Get a hint
Hint

The Federal Reserve uses 3 primary tools to influence AD, what are they?

1 / 6

encourage image

There's no tags or description

Looks like no one added any tags here yet for you.

7 Terms

1

The Federal Reserve uses 3 primary tools to influence AD, what are they?

open market operations

lending to banks and other financial institutions

changes in the interest rate paid on reserves

New cards
2

When faced with a negative shock to AD, the central bank can restore AD through a what policy, but it’s hard to make it right.

expansionary monetary policy

New cards
3

What are the difficulties that make it hard for the Fed to get things right?

monetary policy is subject to uncertainties in impact and timing

New cards
4

If the Federal Reserve increases money supply too much, what will happen?

could lead to disinflation which results in a recession

New cards
5

a significant reduction in the rate of inflation

disinflation

New cards
6

When this dilemma happens, a central bank must choose between too low a growth rate (with a high rate of unemployment) and too high a rate of inflation

negative real shock dilemma

New cards
7

One of the Federal Reserve’s most powerful tools is its what?

influence over expectations

New cards

Explore top notes

note Note
studied byStudied by 18 people
... ago
4.0(1)
note Note
studied byStudied by 12 people
... ago
5.0(1)
note Note
studied byStudied by 34 people
... ago
5.0(1)
note Note
studied byStudied by 13 people
... ago
5.0(2)
note Note
studied byStudied by 1 person
... ago
5.0(1)
note Note
studied byStudied by 57 people
... ago
5.0(1)
note Note
studied byStudied by 22 people
... ago
5.0(1)
note Note
studied byStudied by 1975 people
... ago
4.7(11)

Explore top flashcards

flashcards Flashcard (93)
studied byStudied by 1 person
... ago
5.0(1)
flashcards Flashcard (115)
studied byStudied by 13 people
... ago
5.0(2)
flashcards Flashcard (22)
studied byStudied by 17 people
... ago
5.0(3)
flashcards Flashcard (75)
studied byStudied by 2 people
... ago
5.0(1)
flashcards Flashcard (29)
studied byStudied by 27 people
... ago
5.0(2)
flashcards Flashcard (40)
studied byStudied by 1 person
... ago
5.0(1)
flashcards Flashcard (20)
studied byStudied by 1 person
... ago
5.0(1)
flashcards Flashcard (134)
studied byStudied by 2615 people
... ago
4.0(26)
robot