Question

5.11) select two ways the federal reserves monetary policy can affect the economy.
it encourages the government to borrow from other nations to stimulate the economy.
it provides banks with more money to lend by changing the reserve ratio.
it raises the reserve ratio to encourage more consumer spending.
it buys or sells treasury securities to raise money.
5.12) ______ what would be the best title for the diagram?
a. two theories in managing the economy
b. monetary policy: a surplus and deficit spending policy
c. budgetary oversight: managing the economy
d. fiscal policy: managing through spending
5.13) select three actions that describe a federal fiscal policy.
places more currency notes (dollars) into circulation
spends money to raise demand for goods and services
runs a budgetary deficit
cuts spending or raises taxes to slow economic activity
collects sufficient funds from the reserve ratio to increase monetary availability
passes a law affecting the minimum wage
5.14) ____ u.s. fiscal policy is based on the economic theory of _ stating that the best way to avoid a recession is to stimulate the economy with government spending.
a. franklin d. roosevelt
c. alan greenspan
b. adam smith
d. john maynard keynes
5.15) what are two results of government spending according to the fiscal policy theory?
increases government revenue through higher taxes
stimulates the economy by placing money into the economy
increases the size of government
increases consumer confidence to make purchases

Explanation:

5.11

• Federal Reserve monetary policy tools include reserve requirements and open market operations. The reserve ratio change affects bank lending capacity; open market operations (buying/selling treasuries) adjust money supply.

5.12

• The diagram focuses on government spending and financing, which are core components of fiscal policy. Option D directly matches this focus.

5.13

• Fiscal policy involves government spending, taxation, and budget management. Actions like spending to boost demand, running deficits, and adjusting spending/taxes to manage economic activity are fiscal policy tools.

5.14

• Keynesian economics advocates for government spending to stimulate the economy and avoid recessions, which is the basis of U.S. fiscal policy.

5.15

• Per fiscal policy theory, government spending injects money into the economy to stimulate it and can increase consumer confidence, encouraging purchases.

Answer:

5.11)

• It provides banks with more money to lend by changing the reserve ratio.
• It buys or sells treasury securities to raise money.

5.12) D. Fiscal Policy: Managing Through Spending

5.13)

• spends money to raise demand for goods and services
• runs a budgetary deficit
• cuts spending or raises taxes to slow economic activity

5.14) D. John Maynard Keynes

5.15)

• stimulates the economy by placing money into the economy
• increases consumer confidence to make purchases