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4 cards from this section. Quick, good the night before a test.
What is monetary policy?
Focus on the role of the central bank.
Name one tool of monetary policy.
Think about the different methods a central bank can use to influence the economy.
What is the main goal of monetary policy?
Think about how prices affect the economy.
True or False: The discount rate is a tool for managing the money supply.
Remember what the central bank charges banks.
If the central bank lowers interest rates, how would this likely impact consumer spending and the economy? Discuss your reasoning.
Think about the relationship between borrowing costs and spending habits.
Analyze a scenario where the reserve requirements are drastically increased. What are the potential short-term and long-term economic effects?
Consider both the banking perspective and consumers’ borrowing capabilities.
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