Questions for Review. U.S. WED-Quiz on intro to government ... Constitution scavenger hunt. Economics And You The Federal Reserve Worksheet Answers ... ... Economics students often have a difficult time understanding the difference between monetary and fiscal policy and the tools that the Federal Reserve and the Federal Government use to stimulate and stabilize the economy. Macroeconomics | Supply And Demand | Money Supply In this case of sufficient monetary accommodation, rate of interest does not rise, and therefore there is no crowding-out effect on private investments, the expansionary fiscal policy brings about increase in national income equal to increase in government expenditure times the Keynesian multiplier (i. e., ∆G x 1/1 – MPC). It seems that while Japan's corporations have enjoyed higher profits due to the yen's fall against other currencies, after ultra loose monetary policy, that don't feel confident enough to spend. 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