Differences between fiscal policy and monetary policy
Problem 1. Explain the process of a contractionary monetary policy. Why would the Fed follow a contractionary policy?Problem 2. What are the similarities and differences between fiscal policy and monetary policy?
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Problem: What are the similarities and differences between fiscal policy and monetary policy?
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What does the money supply consist of and what are the respective amounts in the total money supply for the United States?
Assuming the Federal Reserve chooses to shrink the money supply, explain how each of the three tools would be used.
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