Monetary Policy
AP Macroeconomics · Flashcards · Application
AP MACROECONOMICS · FLASHCARDS
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QUESTION
What is the impact of monetary policy on exchange rates?
QUESTION
What is the impact of high inflation on purchasing power?
QUESTION
What happens when the Federal Reserve raises the discount rate?
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ANSWER
Banks borrow less; money supply decreases. Higher discount rates discourage borrowing, contracting credit availability.
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