Fiscal policy

The two "tools" of Fiscal Policy are:

• government's power to tax

• government's power to spend

• Central banks changing interest rates

• Banks lending money

If the government want to use an expansionary fiscal policy, they could

• Lower tax rates

• Reduce government spending

• Reduce production of consumer goods

• Lower the prices of consumer goods

Assume the unemployment rate is rising and GDP is falling, the fiscal policy action that the federal government should MOST likely follow is 

• Decreasing the money supply

• Decreasing government spending spending

• Decreasing tax rates

• Decreasing the reserve requirement.

During a contraction / recession, the Federal Government should use

• an expansionary fiscal policy

• a contractionary fiscal policy

During a economic expansion, the Federal Government should use...

• an expansionary fiscal policy

• a contractionary fiscal policy

Government use of its taxing and spending power is called ______ Policy

A tax in which the rate you pay rises with your income, wealth, or means to pay is called a __________ tax

• Regressive

• Flat

• Proportional

• Progressive

Reducing consumers' ability to spend their own money is a _______ of taxation

• Benefit

• Cost

The tax that earns the government most of its revenue is the

• Estate tax

• Payroll tax

• Individual income tax

• Corporate tax

A tax levied in a specific amount onto a specific good is called a(n)

• Income tax

• Excise tax

• Estate tax

• Sales tax