Question

What is discretionary fiscal policy? 

______________________________ is a fiscal policy action that involves lowering taxes or raising government payments, which would shift the aggregate demand curve to the right. 

_________________________________ is a fiscal policy action that involves raising taxes or decreasing government payments (spending), which would shift the aggregate demand curve to the left.

What is the Federal Reserve System? How many Federal Reserve districts are? How many Federal Reserve districts are located in Missouri and where are they located? 

The Federal Reserve Board of Governors consists of how many members? How are they appointed and how many each member serves? 

What is the Federal Open Market Committee and what role does it play within the Federal Reserve System?

Answer 1

1.

Discretionary fiscal policy refers to the fiscal policy initiatives taken up by the government to either expand or contract the economy using government spending and or taxation policies. These policies are intentional and used to bring necessary changes in the economic scenario of the country.

2.

Expansionary fiscal policy

It is the policy, used to stimulate the aggregate demand and help economy to expand and create new jobs.

3.

Contractionary fiscal policy

It is the policy that is used to control the aggregate demand and help bring price stability. It is used to shrink the economy as necessary.

4.

Federal reserve system is the central banking system that is used to regulate the banking system and implement monetary policy in the US economy. It is the system, that helps banks work with collective objectives and develop more confidence among the depositors and investors. Under this system, whole USA has been divided into 12 Federal reserve districts, and each district has one federal reserve bank to monitor the banking activities and overall health in that district.

There are 12 Federal reserve districts. In Missouri, there are 2 Federal reserve districts and banks. Their locations are Kansas City and St. Luis.

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