5.4 Economic Policy: Influential Theories Answers

According to the Fed, what were the major problems during the financial crisis of 2008? Check all that apply.

Which factors did you include in your response? Check any that apply.

Use the drop-down menus to complete each sentence. was an economist who led a new school of classical economics. The concept of laissez faire refers to government intervention in the economy. The theory that governments should assist in economic crises through fiscal and monetary policy can be credited to .

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The theory that governments should assist in economic crises through fiscal and monetary policy can be credited to [___].

Use the drop-down menus to complete each sentence. According to the theories of Friedrich August von Hayek, the economy may be too complicated to think in terms of . Hayek believed that was dangerous and could lead to severe inflation. Milton Friedman supported changes to policy to influence economic growth.

contractionary policy✔ expansionary policy

taxationspending✔ monetary

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did✔ did not

✔ 0%10%20%

Identify the actions taken by the Fed to assist banks during the financial crisis of 2008. Check all that apply.

According to the Fed, what were the major problems during the financial crisis of 2008? Check all that apply.The money supply became less liquid.Consumer spending increased dramatically.Lending and credit stopped.Banks were too easily able to fulfill consumer demands for loans.It was difficult for banks to receive the loans needed to have cash required to function.

Identify the actions taken by the Fed to assist banks during the financial crisis of 2008. Check all that apply.The Fed implemented new fiscal policy measures to encourage consumer spending.The Fed placed a cap on the cash that individuals could receive from banks at one time.The Fed bought securities to increase the money supply.The Fed lowered interest rates, hoping to increase available credit.The Fed carried out open market operations to stimulate growth.

Use the drop-down menus to complete each sentence.

✔ littlelargeunlimited

Smith✔ KeynesHayek

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