Fiscal and Monetary Policy

Who is responsible for making fiscal policy decision? 

• The President and Congress
• The Federal Reserve System
• The National Council of Economic Advisors
• The Department of Commerce

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

• Physical Policy

• Fiscal Policy

• The Federal Reserve

• Monetary Policy

Which of the following would stimulate the economy?

• Decrease taxes

• Raise taxes

• Government spends more on Science research

• Government cuts organizations like the National Science Foundation

Monetary policy decisions are made by:

• Congress

• Senate

• The Fed

• President

What can the government do to slow the economy in order to reduce inflation?

• lower taxes

• raise taxes

• spend more

To help the economy grow, the government can

• increase spending

• decrease spending

• lower the minimum wage

• raise taxes

The action by the FED to adjust the size of the money supply, and to adjust interest rates in order to keep prices down and employment high.

• fiscal policy

• monetary policy

In order to help the economy grow, the FED may____________the reserve requirement, allowing banks to loan more people money so that they spend more

• lower

• raise

• spend more

• save more

In order to slow the economy, the FED may____________ the reserve requirements and there will be less money to loan out to people.

• increase

• decrease

• spend more

• tax more

If the Federal Reserve System wanted to stimulate the U.S. economy and reduce unemployment, it would

• cause interest rates to decrease because low interest rates encourage business growth and expansion

• cause interest rates to rise because high interest rates encourage business growth and expansion

• increase the discount rate it charges banks, which would increase the money supply

• increase consumer spending by reducing the money supply