4.2 Fiscal Policy

Open Ended

In what ways can government spending influence economic stability?

Multiple Choice

Why is fiscal policy significant in stabilizing a country's economy?

• It helps regulate inflation and unemployment.

• It increases government control over businesses.

• It eliminates the need for monetary policy.

• It only benefits the wealthy.

Multiple Choice

Why might a government choose to slow down the economy using contractionary fiscal policy?

• To increase employment

• To prevent inflation and devaluation of money

• To encourage consumer spending

• To increase government debt

Multiple Choice

Which of the following is an effect of expansionary fiscal policies?

• Decrease Real GDP

• Decrease Employment

• Increase Price Level

• Decrease Consumer Spending

Open Ended

Explain how lowering taxes can stimulate economic growth. Use examples from the lesson to support your answer.

Multiple Select

Which of the following actions are associated with contractionary fiscal policies?

• Raising taxes

• Increasing government spending

• Cutting government spending

• Lowering taxes

Fill in the Blanks

During President Bill Clinton's time in office, the federal budget had a

rather than a deficit.

Fill in the Blanks

Fill in the blank: The two main tools of fiscal policy are taxes and

.

Open Ended

Reflecting on today's lesson about fiscal policy, what questions do you still have or what would you like to learn more about regarding how Congress and the President use taxes and government spending to stabilize the economy?