Question

During a period of economic growth, investors are
likely to take risks and invest funds.

Monetary policy is directly implemented by
.

Fiscal policy seeks to affect the economy and interest rates by directly modifying
.

A decrease in the amount of money available to investors is most likely to result in
.

Answer 1

Monetary policy is directly implemented by the central bank (e.g., the Federal Reserve).

Fiscal policy seeks to affect the economy and interest rates by directly modifying government spending and taxation.

A decrease in the amount of money available to investors is most likely to result in higher interest rates (and thus reduced investment).