Fiscal Policy Lesson

Fiscal Policy

Multiple Choice

An example of a contractionary fiscal policy would be if:

• taxes were cut

• the government bailed out GM

• the Fed decrease the fed funds rate

• taxes were increased

Multiple Choice

Use of government spending and revenue collection measures (taxes) to influence the economy.

• Monetary Policy

• US Savings Bonds

• Deficit Spending

• Fiscal Policy

Multiple Choice

Does increasing the money supply cause inflation or deflation?

• Inflation
• Deflation

Multiple Choice

True or False-- the Federal Reserve helps with fiscal policy

• True
• False

Multiple Choice

Which of the following is not a tool of fiscal policy?

• Taxing

• Spending

• Interest Rates

• All of these options are tools of fiscal policy.

Multiple Choice

An example of expansionary fiscal policy would be

• cutting taxes.

• cutting government spending.

• cutting production of consumer goods.

• cutting prices of consumer goods.

Multiple Choice

The Federal government is concerned that economic growth is too high, that it is unsustainable, and that inflation is resulting. Which of the following fiscal policies might be enacted to reduce inflation?

• Increasing taxation

• Open market sales

• decreasing taxation

• Increasing government spending

Multiple Choice

Fiscal Policy is the means by which the government keeps the economy stable through taxes and programs provided to the people.

• True

• False

Multiple Choice

If and economy experiences a dramatic rise in prices, which fiscal policy action could be taken?

• Selling securities on the open market

• Raising interest rates

• Reducing government spending

• Raising reserve requirements

Multiple Choice

If the unemployment rate is rising and GDP is falling, the fiscal policy action that the federal government should MOST likely follow is 

• decreasing taxes.
• decreasing spending.
• decreasing the money supply.
• decreasing the reserve requirement.

Multiple Choice

An example of expansionary fiscal policy would be

• cutting taxes.
• cutting government spending.
• cutting production of consumer goods.
• cutting prices of consumer goods.

Multiple Choice

The federal government's overall approach to spending and taxes is called

• Physical Policy
• Fiscal Policy
• Money
• Monetary Policy

Multiple Choice

Taxing & spending to slow the economy is referred to as 

• budget surplus 
• monetary policy
• contractionary policy
• budget deficit

Multiple Choice

Taxing & spending to help the economy grow is referred to as

• expansionary policy
• monetary policy
• contractionary policy
• budget deficit

Multiple Choice

Which of the following are responsible for making fiscal policy decision? 

• The President and Congress
• The Federal Reserve System
• The National Council of Economic Advisors
• The commerce Department

Multiple Choice

Who is in charge of fiscal policy?

• Government
• Federal Reserve

Multiple Choice

a rise in the cost of goods and services

• inflation

• discount rate

• interest

• monetary policy

Multiple Choice

During a contraction / recession, the Federal Government should use

• an expansionary fiscal policy

• a contractionary fiscal policy

Multiple Choice

Taxing & spending to help the economy grow is referred to as

• expansionary policy
• monetary policy
• contractionary policy
• budget deficit

Multiple Select

The two "tools" of Fiscal Policy are: (Must pick 2!)

• the power to tax

• the power to spend

• the power to borrow money

• the power to print money