Fiscal & Monetary Policy

Fiscal Policy is the

• use of taxing and interest rates to influence the economy

• use of money supply and interest rates to influence the economy

• use of taxing and govt. spending to influence the economy

• use of govt. spending and money supply to influence the economy

The annual plan for spending by Congress and the President is

• Federal Budget

• Fiscal Policy

• Money supply

• recession

Expansionary Monetary Policy involves increasing the money supply and govt. spending

• True

• False

Contractionary Fiscal Policy involves

• increase the money supply and increase interest rates

• increasing govt. spending and decrease taxes

• decrease interest rates decrease money supply

• decrease govt. spending and increase taxes

Increase in the national debt would be caused by

• increasing govt. spending and increase taxes

• increasing govt. spending and decrease taxes

• decreasing govt. spending and increase taxes

• increase interest rates and decrease the money supply

Inflation is caused by

• increase in prices in the economy

• to little money in the economy

• greater demand than supply

• greater supply than demand

During a period of recession the best action would be

• increase the money supply and lower interest rates

• decrease govt. spending and decrease taxes

• decrease the money supply and increase govt. spending

• increase interest rates and decrease the money supply

Keynesian Economics believes that increased govt. spending will bring the economy out of recession

• True

• False

The Great Depression helped prove Classical Economic theory

• True

• False

Monetary Policy is implemented by

• The Federal Budget

• The Federal Reserve

• Congress and the President

• Taxing and govt. spending