Download Easy Tight Monetary policy matching

To slow inflation
the FOMC sells
bonds to reduce
the money supply
The Fed raises
interest rates so
consumers will
want to borrow
less and spend less
The Fed raises the The goal of this
reserve
policy is to take
requirement that
money out of
banks have to keep circulation to
so less money is
decrease
available
aggregate demand.
The Fed wants
Less money in
consumers to stop circulation
spending money.
The goal of this
policy is to
decrease the
money supply.
The goal of this
policy is to slow
inflation.
The Fed will sell
government
securities to the
public.
TIGHT $
To decrease
unemployment the
FOMC buys bonds
to increase the
money supply
The Fed lowers
the reserve
requirement that
banks have to keep
so more money is
available to be
borrowed and
spent
The Fed wants
consumers to
spend more money.
The Fed lowers
interest rates so
consumers will
borrow more and
spend more
The goal of this
policy is to put
money into
circulation to
increase aggregate
demand.
The goal of this
policy is to
increase the money
supply.
More money in
circulation
The Fed will buy
government
securities from the
public.
The goal of this
policy is to
promote growth
and create jobs.
Unemployment is
high so the Fed
will use this money
policy
This policy is used
during a
contraction
The Fed will raise
the discount rate
The Fed will lower
the discount rate
This policy is used
during rapid
expansion
This policy is put
in place when GDP
is declining
This policy is put
in place when GDP
is drastically
increasing
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