If you had to guess, what do you think contractionary menas? What do you think expansionary means?
A kind of policy which lays emphasis on reduction in the level of money supply for a lesser spending and investment thereafter so as to slow down an economy.
If a policy is contractionary, the banks are trying to: Control the money supply flows into the economy Discouraging spending by way of increased interest rates and reduced money supply helps control rising inflation. Make the opportunity cost of holding money high so that people want to hold and spend less of it.
A type of macroeconomic policy that is implemented to stimulate the economy and promote economic growth
If a policy is contractionary, the banks are trying to: Reduce the adverse impact on the economy during economic downturns. They can either increase the money supply (to have people spend more) or create new jobs (lowering the unemployment rate).
Draw me a cowboy or cowgirl riding anything but a horse or a bull.
What is the main objective of contractionary monetary policies?
- Reduce inflation
- Increase economic growth
- Stabilize exchange rates
What is the main goal of expansionary fiscal policy?
- To stimulate economic growth
- To reduce inflation
- To decrease government spending
What are some of the main goals of contractionary policies?
What are the potential risks assocation with contractionary policies?
What do you think are the advantages and disadvantages of contractionary policies?
What would be the economic implications of implementing contractionary policies?
What are some tools used in expansionary monetary policy?
- Lowering interest rates, buying securities, decreasing reserve requirements
- Increasing taxes, decreasing government spending, increasing interest rates
- Increasing reserve requirements, selling securities, increasing taxes
Which of the following is a tool used in contractionary fiscal policies?
- Reducing government spending
- Increasing transfer payments
- Decreasing interest rates
What are some of the potential benefits of expansionary policies?
What are some of the potential risks of expansionary policies?
How has the current economic situation been affected by expansionary policies?
What have been some of the most successful examples of expansionary policies?