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Which policy relates to raising the discount rate to member banks will in turn cause the member banks to raise interest rates to their own customers?
The policy that involves raising the discount rate to member banks is known as monetary policy, specifically through the mechanism of the Federal Reserve's discount rate. When the Federal Reserve increases the discount rate, it becomes more expensive for banks to borrow funds, leading them to raise interest rates for their customers to maintain their profit margins. This tightening of monetary policy can help combat inflation but may also slow down economic growth by making borrowing more expensive for consumers and businesses.
Decreasing the reserve requirement involves which type of economic policy?
Monetary Policy
Decreasing government spending involves which type of economic policy?
suppli side economic
Which phrase best describes the economic policy of laissez- fairs?
A laissez-faire economic policy involves a minimum of government interference in business.
Which phrase best describes the economic policy of laissez-fairs?
A laissez-faire economic policy involves a minimum of government interference in business.
Which policy relates to raising the discount rate to member banks will in turn cause the member banks to raise interest rates to their own customers?
The policy that involves raising the discount rate to member banks is known as monetary policy, specifically through the mechanism of the Federal Reserve's discount rate. When the Federal Reserve increases the discount rate, it becomes more expensive for banks to borrow funds, leading them to raise interest rates for their customers to maintain their profit margins. This tightening of monetary policy can help combat inflation but may also slow down economic growth by making borrowing more expensive for consumers and businesses.
Decreasing the reserve requirement involves which type of economic policy?
Monetary Policy
Decreasing government spending involves which type of economic policy?
suppli side economic
Which phrase best describes the economic policy of laissez- fairs?
A laissez-faire economic policy involves a minimum of government interference in business.
Which phrase best describes the economic policy of laissez-fairs?
A laissez-faire economic policy involves a minimum of government interference in business.
Raising the discount rate to member banks will in turn cause the member banks to raise interest rates to their own customers?
monetary policy
Increasing taxes involves which type of economic policy?
Supply-side Economics
Would an increase in taxes be a change in the government's fiscal policy?
Yes, an increase in taxes would be considered a change in the government's fiscal policy. Fiscal policy involves government decisions on taxation and spending to influence the economy. By raising taxes, the government can affect overall demand, potentially slowing economic growth or addressing budget deficits. This adjustment is part of the broader strategy to manage economic conditions.
Which policy Raising the discount rate to member banks will in turn cause the member banks to raise interest rates to their own customers?
Raising the discount rate increases the cost of borrowing for member banks, as they must pay more to access funds from the central bank. In response, member banks typically raise interest rates for their customers to maintain their profit margins and cover the higher costs. This increase in interest rates can lead to reduced borrowing and spending by consumers and businesses, potentially slowing down economic activity. Overall, this policy is a tool used by central banks to manage inflation and influence economic growth.
What term applies to the economic policy that manages the business cycle by changing government spending?
The term that applies to the economic policy managing the business cycle through changes in government spending is "fiscal policy." This approach involves adjusting government expenditures and tax policies to influence economic activity, aiming to stimulate growth during downturns or cool off an overheating economy. By increasing spending or cutting taxes during recessions, and decreasing spending or raising taxes during expansions, fiscal policy seeks to stabilize the economy.
Encouraging investment in research and development through tax cuts involves which type of economic policy?
Encouraging investment in research and development through tax cuts involves supply-side economic policy. The idea of supply-side economics was developed in the 1970s.
Increasing government spending involves which type of economic policy?
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