Fiscal and Economic Policy

Why would the Federal Reserve contract the money supply?

• To slow growing government debt

• To stimulate the economy

• To lower interest rates for banks

• To combat inflation

Which branch of government does the Federal Reserve fall under?

• Legislative

• Executive

• Judicial

• None of the above

What branch of government is responsible for fiscal policy?

• President

• Federal Reserve

• Congress

• Supreme Court

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

• Deflation
• Monetary policy
• Stagnation
• Inflation

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

• Physical Policy
• Fiscal Policy
• Money
• Monetary Policy

"The Fed" refers to the....

• Federal Bureau of Investigation
• Federal Government
• Federal Reserve System
• Federal Income Tax

The Federal Reserve uses ______ to regulate the economy.

• Monetary Policy
• Fiscal Policy

To much money in our economy leads to 

• Inflation
• Recession

If the economy is in a severe recession, which of the following policy actions is most appropriate?

• (A) Keeping the money supply constant and reducing the budget deficit

• (B) Decreasing government spending and taxes by the same amount

• (C) Increasing both the money supply and government spending

• (D) Increasing both the federal funds rate and taxes

• (E) Decreasing the money supply and increasing taxes

Which person is associated with demand side policies?

• Ronald Reagan

• John Keynes

• Adam Smith

• Franklin D. Roosevelt