Economic Policy: Influential Theories Answers

Use the drop-down menus to complete each sentence.

✔ littlelargeunlimited

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. 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 .

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.

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

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

Use the drop-down menus to complete each sentence. A notable action taken by the Fed during the financial crisis of 2008 was carrying out open market operations, which was intended to lower the . The actions taken by the Fed have immediate positive results, despite the fact that the Federal Funds Rate reached nearly .

Friedman✔ SmithKeynes

✔ aggregatesIndividual behaviors

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.

✔ Federal Funds Ratemoney supply

Did you include any of these factors in your response? Check all that apply.

According to the video, did the Federal Reserve pursue an expansionary or a contractionary monetary policy?Give at least two examples of actions that support your answer.

contractionary policy✔ expansionary policy

did✔ did not

✔ littlelargeunlimited

contractionary policy✔ expansionary policy

did✔ did not