Financial Sector

Contractionary monetary policy.

Expansionary monetary policy.

Cyclical monetary policy.

Supply-side monetary policy.

Lower interest rates

Increase interest rates

Remain neutral in interest rate adjustment

Increase government spending

Raise the interest rate.

Lower the reserve requirement for banks.

Buy government securities on the open market.

Provide subsidies to consumers directly

The Fed hopes to increase investment by providing capital directly into stock markets

The Fed wants to finance a budget deficit by borrowing funds directly from banks

The Fed aims to decrease bank reserves and raise interest rates

The Fed intends to inject liquidity into banks and lower interest rates

Selling bonds to finance budget deficits and fund individuals and corporations.

Offering standing facilities to provide temporary assistance to banks facing shortages.

Issuing special drawing rights (SDRs) to aid balance of payments issues.

By purchasing government securities to inject liquidity into the system.

There will be no impact on borrowing habits

It increases consumer lending capacities

It discourages them from borrowing from central banks

It encourages them from borrowing from central banks

They directly set federal income tax rates.

They oversee national defense budget allocation.

They make decisions regarding open market operations.

They regulate interstate commerce laws.

The country would see decreased exports because a weaker currency discourages foreign investment.

The country's budget deficit automatically widens, resulting in a weaker currency.

There would be little to no impact since monetary policy primarily affects financial markets rather than trade balances.

The country may experience improved balance of trade because domestic goods become cheaper for foreign buyers.

Decrease reserve requirements for banks.

Raise reserve requirements for banks.

Buy more government bonds from financial institutions.

Lower interest rates for consumer loans directly.

It decreases interest rates

It stabilizes interest rates

It makes interest rates negative

It increases interest rates