Ch. 15-2&3 Fiscal Policy Strategies & The Federal Budget

Multiple Choice

What is the main goal of supply-side economics?

• Achieving economic stability and growth by increasing the supply of goods and services

• Reducing government spending to balance the budget

• Increasing demand for goods and services through consumer spending

• Raising taxes to fund public programs

Multiple Choice

Which of the following is NOT a role of government in supply-side economics?

• Favoring tax cuts to encourage investment

• Reducing taxes

• Implementing many types of government regulation

• Taking a laissez-faire approach

Open Ended

Compare and contrast the main goals and government roles in supply-side economics and demand-side economics.

Multiple Choice

Which of the following are tools of fiscal policy used by Congress?

• Tax rates

• Government spending

• Public transfer payments

• All of the above

Multiple Choice

Which of the following is a potential problem with expansionary fiscal policy?

• It can create a fiscal drag

• It may be difficult to predict economic behaviors

• It always reduces unemployment

• It always increases inflation

Multiple Choice

Which category saw the largest increase in federal spending from 2007 to 2012?

• Social Security

• Military Spending

• Medicare & Medicaid

• Interest on National Debt

Open Ended

Explain how wartime spending and increased corruption influenced the creation of the federal budget process.

Multiple Select

Which of the following are reasons the government has often relied on deficit spending?

• National emergencies/wars

• To reduce taxes for the wealthy

• To stimulate the economy during recessions

• To promote the economic well being of its citizens

Multiple Choice

Based on the chart, during which years did the United States experience a budget surplus?

• 1940-1945

• 1960-1965

• 1998-2001

• 2008-2012

Open Ended

Describe the trend in the growth of the national debt from 1790 to 2015 and identify two key events that contributed to significant increases.

Multiple Choice

Which of the following is NOT a method mentioned for balancing the federal budget?

• Increasing revenues by raising taxes

• Decreasing government expenditures

• Legislating a balanced budget

• Increasing government spending