Fiscal Policy Review

Fiscal policy requires the gov't to spend money on government projects in order to _________economy.

• contract

• expand

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

What term is used to describe an increase in the general price level?

• Deflation
• Monetary policy
• Stagnation
• Inflation

Increasing spending to help the economy grow is referred to as

• expansionary policy

• monetary policy

• contractionary policy

• budget deficit

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

• Physical Policy
• Fiscal Policy
• Money
• Monetary Policy

An example of expansionary fiscal policy would be

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

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.

When we need to slow economic growth, we need

• Expansionary Fiscal and Monetary Policy
• Contractionary Fiscal and Monetary Policy

How does a budget deficit relate to the national debt?

• They are the same thing.
• Budget deficits are more than the national debt.
• Budget deficits reduce the size of the national debt.
• Budget deficits create the national debt.

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