Fiscal Policy

Who is in charge of fiscal policy?

• Government
• Federal Reserve

Taxing & spending to help the economy grow is referred to as

• expansionary policy
• monetary policy
• contractionary policy
• budget deficit

Taxing & spending to slow the economy is referred to as 

• budget surplus 
• monetary policy
• contractionary policy
• budget deficit

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?

• Selling securities on the open market
• Raising interest rates
• Reducing government spending
• Raising reserve requirements

Fiscal Policy is the means by which the government keeps the economy stable through taxes and programs provided to the people.

• True
• False

a tax in which the tax rate increases as the taxable amount increases

• progressive
• regressive
• flat
• proportional

Under a ________ tax system, individuals and entities with low incomes pay a higher amount of that income in taxes compared to high-income earners. 

• Regressive
• Progressive
• Proportional
• Flat