Fiscal Policy

Who is in charge of fiscal policy?

• Government
• Federal Reserve

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

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.

If and economy experiences a dramatic rise in prices, which fiscal policy action could be taken?

• Decreasing taxes

• Increasing government spending

• Reducing government spending

• Raising reserve requirements

The Federal government is concerned that economic growth is too high, that it is unsustainable, and that inflation is resulting. Which of the following fiscal policies  might be enacted to reduce inflation?

• Increasing taxation
• Open market sales
• decreasing taxation
• Increasing government spending

Which of the following is not a tool of fiscal policy?

• Taxing
• Spending
• Interest Rates
• All of these options are tools of fiscal policy.

The two "tools" of Fiscal Policy are:

• the power to tax

• the power to spend

• the power to borrow money

• the power to print money

During a contraction / recession, the Federal Government should use

• an expansionary fiscal policy

• a contractionary fiscal policy

An example of a contractionary fiscal policy would be if:

• taxes were cut
• the government bailed out GM 
• the Fed decrease the fed funds rate
• taxes were increased