Fiscal and Monetary Policy

Fiscal Policy is concerned with

• Government Spending and taxation
• Consumer spending and productivity
• Government spending and the money supply
• Taxation and inflation

An example of expansionary is what? (Multiple answers - must pick all to receive credit)

• Decrease taxes

• Raise taxes

• Government spends more on Science research

• Government cuts organizations like the National Science Foundation

Examples of contractionary fiscal policy includes which of the following (choose all correct answers)?

• Raise taxes on corporations

• Lower the corporate tax rate

• Government increases spending on research in Antarctica

• Government cuts spending on education

The goals of monetary policy include (more than one answer - pick all correct answers for credit):

• regulating the amount of money circulating in the economy

• Keep inflation high

• Keep inflation low

• Keep unemployment low

• Raise the unemployment levels

The goal of monetary policy is to

• sell bonds

• reduce unemployment

• prevent inflationary and recessionary economic periods

• increase tariffs on foreign countries

Lowering the reserve requirement will reduce

• unemployment
• inflation

Which of the following is a monetary policy action used to combat a recession?

• cutting taxes
• increasing the money supply
• decreasing the money supply
• raising taxes

Which of the following are fiscal policy tools (select more than one)?

• adjusting the reserve requirement

• adjusting the discount rate

• changing government spending

• changing income taxes

• buying/selling bonds via open market operations

Which monetary policy tool would speed up the economy?

• increasing reserve requirement

• decreasing income taxes

• increasing government spending

• decreasing interest paid on reserves

Which combination of fiscal and monetary policy would speed up the economy?

• increase taxes; decrease reserve requirement

• decrease taxes; decrease discount rate

• increase spending; increase interest on reserves

• decrease spending; sell bonds via open market operations