Fiscal Policy

Fiscal Policy

Multiple Choice

What is Fiscal Policy?

• Use of gov't spending and tax policies to

  influence economic conditions

• A central bank influencing a nation's money supply

Multiple Choice

Who had a big influence on Fiscal Policy?

• John Maynard Keynes

• Thomas Malthus

• Josh Allen

• Adam Smith

Multiple Choice

Keynes argued that recessions are due to a deficiency in:

• Consumption

• Investment

• Consumption and Investment

• Government Spending

Fill in the Blank

Keynes believed that ___________ could stabilize the business cycle and regulate economic output

Multiple Choice

According to Keynesian economists, the private sector components of aggregate demand are

• Not very emotional

• Very emotional

Multiple Choice

What area, according to Keynesian economists, can be managed rationally?

• Government taxation and spending

• Investment

• Consumer spending

• Net Exports

Fill in the Blank

What are the two major Fiscal policies?

Multiple Choice

Expansionary Fiscal Policy is usually characterized by:

• Deficit Spending

• Budget Surplusses

• A balanced budget

Multiple Select

What are some of the downsides of Expansionary Fiscal Policy? (select all that apply)

• Mounting deficits

• Gov't spending crowds out investment by private sector

• Fiscal stimulus is easy to reverse

• Economic expansion can get out of hand

Multiple Choice

What is NOT one of the things a gov't might do as part of an Expansionary Fiscal Policy?

• Lower taxes

• Increase spending

• Issue rebates

• Cut spending

Multiple Choice

TRUE/FALSE: Contractionary Fiscal Policy is rarely used.

• True

• False