Question 1
The Federal Reserve through monetary policy can help expand the economy by
◦ lowering income taxes on individuals.
◦ reducing tariffs such that foreign exports can increase.
◦ supporting a moderate growth of the money supply.
◦ increasing government spending on the national infrastructure.
Question 2
The government has an expansionary economic policy when it
◦ increases taxes.
◦ increases government spending.
◦ promotes rising interest rates.
◦ limits exports of goods and services.