Fiscal Policy pop quiz

What does Fiscal Policy do?

• decides tax rate

• decides bank rates

• keep the economy stable

• allows the economy to self correct

Select the two options that are the tools the government uses to stabilize the economy

• taxes

• legislation

• lobbying

• spending

In which department does the government spend the majority of it's discretionary budget?

• veteran services

• military

• social security

• medicare

In the formula: GDP=C+I+G+ (X-M) what does "C" stand for?

• aggregate demand

• Congressional spending

• business spending

• consumer spending

In the formula: GDP=C+I+G+ (X-M) what does "I" stand for?

• aggregate demand

• Congressional spending

• business spending

• consumer spending

In the formula: GDP=C+I+G+ (X-M) what letter is the only one that can be used to guide the economy back on track?

• C

• I

• G

• X-M

Select the options that are part of expansionary policies

• increasing gov't spending

• decreasing gov't spending

• decrease taxes

• increase taxes

Select the options that are part of contractionary policies

• increasing gov't spending

• decreasing gov't spending

• decrease taxes

• increase taxes

Which of the following is NOT a problem with expansionary policy?

• delayed response

• political pressure

• inelastic funds

• predicting the future