3.8 Fiscal Policy

A fiscal policy aimed at increasing economic output.

• EXPANSIONARY FISCAL POLICY

• CONTRACTIONARY FISCAL POLICY

• INFLATIONARY FISCAL POLICY

• RECESSIONARY FISCAL POLICY

A fiscal policy aimed To slow down economic activity

• EXPANSIONARY FISCAL POLICY

• CONTRACTIONARY FISCAL POLICY

• INFLATIONARY FISCAL POLICY

• RECESSIONARY FISCAL POLICY

The federal government's overall approach to spending and taxes is called

• Physical Policy

• Fiscal Policy

• вежба

• Monetary Policy

Governments implement ____ policies to achieve macroeconomic goals, such as full employment

• fiscal

• monetary

• social

• supply-side

What are the tools of fiscal policy the government uses

• government spending

• taxes/transfers

• inflation

• interest rates

Changes in government spending affect aggregate demand _____

• directly

• indirectly

• negatively

• positively

Changes in taxes/transfers affect aggregate demand _____

• directly

• indirectly

• positively

• negatively

Which multiplier is greater? The government spending multiplier or the tax multiplier

• spending multiplier

• tax multiplier

• they are the same

Which factors can fiscal policy influence?

• aggregate demand

• real output

• price level

• aggregate supply

Match the following

• Fiscal Policy (effect)

• Relatively small because there is a limit to the amount interest rates can be cut

• Monetary Policy (effect)

• Large because the relief can be measured in trillions of dollars

• Fiscal Policy (time)

• Slow because it takes time to decide on and implement

• Monetary Policy (time)

• Fast because action takes place immediately