Unit 3 Review - Economic Instability & Solutions

Front

The use of taxes and government spending to affect the economy

Back

Fiscal Policy

Front

a plan to reduce aggregate demand and slow the economy

Back

Contractionary Fiscal Policy

Front

a plan to increase aggregate demand and stimulate the economy

Back

Expansionary Fiscal Policy

Front

An example of expansionary fiscal policy would be: cutting taxes., cutting government spending., cutting production of consumer goods., cutting prices of consumer goods.

Back

cutting taxes.

Front

During a recession, which of the following is likely to occur? an increase in real wages, an increase in production, an increase in the GDP growth rate, an increase in the unemployment rate

Back

an increase in the unemployment rate

Front

Which are contractionary fiscal policies -- meant to slow down speedy economic growth? Options: increased taxation and increased government spending, increased taxation and decreased government spending, decreased taxation and no change in government spending, no change in taxation and increased government spending

Back

increased taxation and decreased government spending

Front

Which of the following is responsible for fiscal policy? Options: the Federal Bureau of Investigation, the Federal Reserve, Congress & the President, the Federal Reserve banks

Back

Congress & the President

Front

Which monetary policy tool would speed up the economy? Options: increasing reserve requirement to decrease the money supply, decreasing income taxes, increasing government spending, decreasing interest paid on reserves to increase the money supply

Back

decreasing interest paid on reserves to increase the money supply

Front

Which monetary policy tool would be expansionary? Options: decrease reserve requirement to increase the money supply, increase discount rate to decrease the money supply, increase interest paid on reserves to decrease the money supply, selling bonds via open market operations to decrease the money supply

Back

decrease reserve requirement to increase the money supply

Front

How are monetary policy and fiscal policy similar?

Back

They are both used to keep the economy stable.