Business, 28.02.2021 17:20 KinG5152

A. Monetary Policy involves changing taxes and government spending/ the design of currency/ exports/ the money supply. In the United States, Monetary Policy is implemented by the Federal Reserve/ President and Congress/ Secretary of the Treasury/ states. b. Contractionary Monetary Policy/ Lower prices/ Expansionary MonetaryPolicy/ Larger coins can be used to address a Recessionary Gap; while Expansionary MonetaryPolicy/ smaller coins/ Contractionary Monetary Policy/ higher prices can be used to address an Inflationary Gap.

c. To enact Contractionary Monetary Policy, the central bank will buy/ sell bonds. This increase/decrease the amount of cash in the economy. This will cause bond prices to fall/ stay the same/ rise, and interest rates to fall/ stay the same/ rise. The change in interest rates causes investment and consumption to fall/ stay the same/ rise, shifting Short-Run Aggregate Supply/ Aggregate Demand/ Long-Run Aggregate Supply (outwards/ inwards).

d. To enact Expansionary Monetary Policy, the central bank will buy/ sell bonds. This increase/decrease the amount of cash in the economy. This will cause bond prices to fall/ stay the same/ rise, and interest rates to fall/ stay the same/ rise. The change in interest rates causes investment and consumption to fall/ stay the same/ rise, shifting Short-Run Aggregate Supply/ Aggregate Demand/ Long-Run Aggregate Supply (outwards/ inwards).

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