Monetary or Fiscal Policy??

Read each of the following scenarios and identify if it relates to Money & Banking (Monetary Policy) or Taxing & Spending (Fiscal Policy). Highlight the word or phrase that helped you decide and then write Monetary or Fiscal at the end of the scenario. The first one has been done for you.

EX: a. The Wall Street Journal reported that as a result of recent policy, the interest rate fell to a 30 year low. Monetary

b. The Department of Commerce reports that homes have become more affordable, as a result of a decrease in interest rates.

c. Following an expansion of military efforts, inflation increased by 5% in the past year.

d. Lower tax rates have led to an increase in housing starts.

e. Due to current policy changes, the interest rate on credit cards has increased.

f. Banks are now required to hold larger excess reserves, resulting in higher interest rates.

g. The Federal Funds Rate dropped last week to 0.25%.

h. The Discount Rate has increased to 3.5%, to slow inflation.

i. Congress passed a bill increasing the Federal Debt limit.

j. As a result of the government policies because of a slowdown in the economy, the U.S. increased its deficit to a record $2.3 trillion.

k. Government passed a budget that led to a greater deficit.

l. Funding for the military is increased.

m. The Inheritance Tax is eliminated.

n. The deduction for homeowner's interest payments is eliminated.

o. The tax rate on the top 5% of income earners is increased.

p. A subsidy is placed on corn used for making gasoline.

q. Funding for Education is increased.

r. Funding for the stimulus package is delayed.