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fiscal policy to fight recession
increase gvmt spending, decrease taxes
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fiscal policy to fight inflation
decrease gvmt spending, increase taxes
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monetary policy to fight recession
increase rate of growth of money supply, decrease interest rates
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monetary policy to fight inflation
decrease rate of growth of money supply, increase interest rates
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monetary instruments of the federal reserve to stimulate growth, lower unemp, increase growth of money supply, lower interest rates
- buy gvmt securities
- lower discount rate
- lower federal funds rate
- lower reserve ratio
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monetary instruments of the federal reserve to slow growth, reduce inflation, decrease rate of growth of money supply, increase interest rates
- sell govmt securities
- raise discount rate
- raise federal funds rate
- raise reserve ratio
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chief means of chaning money supply
open market operations
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automatic stabilizers
gvmt spending and taxes that automatically increase or decrease along with the business cycle
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multiplier effect
the series of induced increases in consumption spending that results from an initial increase in autonomous expenditures
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