Fiscal and Monetary Policy Review

These flashcards cover key concepts related to fiscal and monetary policy as discussed in the lecture notes.

Fiscal Policy

Changes in federal government spending or taxes designed to promote full employment, price stability, and reasonable rates.

Contractionary Fiscal Policy

A type of fiscal policy used to control inflation, typically applied when inflation is high.

Expansionary Fiscal Policy

A type of fiscal policy used during economic hardships, such as severe recession, to increase demand and reduce unemployment.

Monetary Policy

Actions by the Federal Reserve that change the money supply in an effort to influence the economy.

Contractionary Monetary Policy

Monetary policy applied when inflation is high, aimed at reducing the money supply to control rising prices.

Expansionary Monetary Policy

Monetary policy applied during high unemployment and severe recession, aimed at increasing money supply to spur economic activity.