Question: Need help with the homework for this week, distinguishing monetary and fiscal policy. 1. According to mainstream macroeconomics. one appropriate response to a financial crunch

Need help with the homework for this week, distinguishing monetary and fiscal policy.

1. According to mainstream macroeconomics. one appropriate response to a financial crunch is for the Federal Reserve to decrease the money supply. a. Is it TRUE or FALSE? b. Support your response in (a) by answering the following questions. I There are three types of monetary policy tools, name all of them. Which one of them is regularly conducted by the Fed to monitor the economy? I What is the effect to the federal funds rate and short-term interest rates for your response in (a)? I Describe how open market operation will affect bank reserves, federal funds rate, bank loans. money creation and supply. interest rates. aggregate demand, unemployment rate, and real GDP in the economy with your response in (a)

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