Economics

A situation when increased interest rates lead to a reduction in private investment spending such that it dampens the initial increase of total investment spending is called crowding out effect

most states require a balanced budget for state spending

the government restricts the amount of money that banks can lend.

Cutting Taxes

john maynard keynes

In contrast with Classical economics, Keynesian economics takes a broader view of the economy

The federal reserve system was given more centralized power

a decrease in the money supply

a tax cut does not cause workers to work significantly more hours

FAC (Federal Advisory Councel)

The government can use deficit spending to increase aggregate demand and pull the economy out of recession.

The federal funds rate is the interest rate banks charge on loans in the federal funds market. The federal funds rate is not set administratively by the Fed. Instead, the rate is determined by the supply of reserves relative to the demand for them.

For regulating the nations money supply

above the federal funds rate

If the Fed were to impose a slight increase in the required reserves ratio, there would be _____.

wait for the economy to achieve equilibrium

People try to fulfill both with limited resources.

People make economic choices about what to do with their

resources.

A store that buys a shipment of computers can't afford to buy any new phones