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HFA TEST 2 2025 QUESTIONS AND ANSWERS 100% PASS

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HFA TEST 2 2025 QUESTIONS AND ANSWERS 100% PASS Dual Mandate of the Federal Reserve - maximum employment and low, stable inflation monetary policy - controlled by the central bank, setting a target for federal funds rate which affects interest rates, and buying/selling bonds on open market expansionary monetary policy - to get max employment, lowers interest rates, and purchases bonds contractionary monetary policy - to get low inflation, raises interest rates, sells bonds fiscal policy - government spending and taxes expansionary fiscal policy - to stimulate economic growth, lowering taxes, and increasing government spending contractionary fiscal policy - to slow down economic

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HFA TEST 2 2025 QUESTIONS
AND ANSWERS 100% PASS


Dual Mandate of the Federal Reserve - ✔✔maximum employment and low, stable
inflation

monetary policy - ✔✔controlled by the central bank, setting a target for federal funds
rate which affects interest rates, and buying/selling bonds on open market

expansionary monetary policy - ✔✔to get max employment, lowers interest rates, and
purchases bonds

contractionary monetary policy - ✔✔to get low inflation, raises interest rates, sells
bonds

fiscal policy - ✔✔government spending and taxes

expansionary fiscal policy - ✔✔to stimulate economic growth, lowering taxes, and
increasing government spending

contractionary fiscal policy - ✔✔to slow down economic growth, increasing taxes, and
lowering government spending, used to combat inflation and debt

John Maynard Keynes - ✔✔British economist who argued that for a nation to recovery
fully from a depression, the govt had to spend money to encourage investment and
consumption



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