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
COPYRIGHT © 2025 BY GRACE AMELIA, ALL RIGHTS RESERVED 1
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
COPYRIGHT © 2025 BY GRACE AMELIA, ALL RIGHTS RESERVED 1
